def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
Filed by the Registrant þ
Filed by a Party other than the Registrant o
Check the appropriate box:
o Preliminary Proxy Statement
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
þ Definitive Proxy Statement
o Definitive Additional Materials
o Soliciting Material under Rule 240.14a-12
INTUIT INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
þ No fee required.
o Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and
identify the filing for which the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or Schedule and the date of its filing.
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INTUIT
INC.
NOTICE OF 2007 ANNUAL MEETING
OF STOCKHOLDERS
Dear Stockholder:
You are cordially invited to attend our 2007 Annual Meeting of
Stockholders, which will be held at 8:30 a.m. Pacific
Standard Time on December 14, 2007 at our offices at 2600
Casey Avenue, Building 9, Mountain View, California. We will
also offer a webcast of the annual meeting at
http://www.intuit.com/about_intuit/investors/webcast.jhtml.
We are holding the meeting to:
1. Elect ten directors to hold office until the next annual
meeting of stockholders or until their respective successors
have been elected;
2. Ratify the selection of Ernst & Young LLP as
our independent registered public accounting firm for the fiscal
year ending July 31, 2008;
3. Approve an amendment to our 2005 Equity Incentive Plan
to (1) extend the term of the plan by an additional year;
and (2) add 10,000,000 shares to cover awards under
the plan through its amended term;
4. Approve the adoption of our Senior Executive Incentive
Plan; and
5. Consider any other matters that may properly be brought
before the meeting.
Items 1 through 4 are more fully described in the attached
proxy statement. We have not received notice of other matters
that may be properly presented at the annual meeting.
Only stockholders who owned our stock at the close of business
on October 19, 2007 may vote at the meeting, or at any
adjournment or postponement of the meeting. For 10 days
prior to the annual meeting, a list of stockholders eligible to
vote at the meeting will be available for review during our
regular business hours at our headquarters at 2700 Coast Avenue,
Mountain View, CA 94043. If you would like to view the
stockholder list, please call Intuit Investor Relations at
(650) 944-3560
to schedule an appointment.
Your vote is important. Whether or not you plan to attend the
meeting, please cast your vote, as instructed in the Notice of
Internet Availability of Proxy Materials, over the Internet or
by telephone, as promptly as possible. You may also request a
paper proxy card to submit your vote by mail, if you prefer.
We encourage you to vote via the Internet. It is
convenient and saves us significant postage and processing costs.
By order of the Board of Directors,
Laura A. Fennell
Senior Vice President, General Counsel and Corporate
Secretary
Mountain View, California
November 1, 2007
INTUIT
INC.
PROXY
STATEMENT 2007 ANNUAL MEETING OF STOCKHOLDERS
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1
INTUIT
INC.
P.O. Box 7850
Mountain View, CA
94039-7850
PROXY
STATEMENT FOR THE
2007 ANNUAL MEETING OF STOCKHOLDERS
INFORMATION
ABOUT THE MEETING, VOTING AND PROXIES
Date,
Time and Place of Meeting
Intuits Board of Directors is asking for your proxy for
use at the Intuit Inc. 2007 Annual Meeting of Stockholders (the
Meeting) and at any adjournment or postponement of
the Meeting for the purposes set forth in the accompanying
Notice of Annual Meeting of Stockholders. We are holding the
Meeting on Friday, December 14, 2007 at
8:30 a.m. Pacific Standard Time at our offices at 2600
Casey Avenue, Building 9, Mountain View, California. We have
first released this proxy statement to Intuit stockholders
beginning on November 1, 2007.
Internet
Availability of Proxy Materials
Under the rules recently adopted by the U.S. Securities and
Exchange Commission (SEC), we are now furnishing
proxy materials to our stockholders on the Internet, rather than
mailing printed copies of those materials to each stockholder.
If you received a Notice of Internet Availability of Proxy
Materials by mail, you will not receive a printed copy of the
proxy materials unless you request one. Instead, the Notice of
Internet Availability will instruct you as to how you may access
and review the proxy materials on the Internet. The Notice of
Internet Availability also instructs you as to how you may
access your proxy card to vote on the Internet. If you received
a Notice of Internet Availability by mail and would like to
receive a printed copy of our proxy materials, please follow the
instructions included in the Notice of Internet Availability.
We anticipate that the Notice of Internet Availability will be
mailed to stockholders on or about November 1, 2007.
Record
Date, Outstanding Shares and Quorum
Only holders of record of Intuit common stock at the close of
business on October 19, 2007 (called the Record
Date) will be entitled to vote at the Meeting. On the
Record Date, we had approximately 335,299,597 shares
outstanding and entitled to vote, held by approximately 842
stockholders of record and approximately 85,447 beneficial
owners, who may hold their shares through banks, brokers or
other nominees. We need a quorum to take action at the Meeting.
We will have a quorum if a majority of the shares outstanding on
the Record Date are present at the Meeting, either in person or
by proxy.
If by the date of the Meeting we do not receive sufficient
shares to constitute a quorum or approve one or more of the
proposals, the Chair of the Meeting, or the persons named as
proxies, may propose one or more adjournments of the Meeting to
permit further solicitation of proxies. The persons named as
proxies would typically exercise their authority to vote in
favor of adjournment.
Voting
Rights
Holders of our common stock are entitled to one vote for each
share they owned on the Record Date. Cumulative voting for
directors is not permitted. The Inspector of Elections appointed
for the Meeting will tabulate all votes. The Inspector will
separately tabulate yes and no votes, abstentions and broker
non-votes for each proposal.
Voting
and Revoking Proxies
Intuits Board of Directors is soliciting proxies for use
at the Meeting. All stockholders have three options for
submitting their vote prior to the Meeting:
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via the Internet at www.proxyvote.com;
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by phone (please see your proxy card for instructions); or
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by requesting, completing and mailing in a paper proxy card, as
outlined in the Notice of Internet Availability.
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We encourage you to register your vote via the Internet. If you
attend the Meeting, you may also submit your vote in person, and
any votes that you previously submitted whether via
the Internet, by phone or by mail will be superseded
by the vote that you cast at the Meeting. Whether your proxy is
submitted via the Internet, by phone or by mail, if it is
properly completed and submitted and if you do not revoke it
prior to the Meeting, your shares will be voted at the Meeting
in the manner set forth in this proxy statement or as otherwise
specified by you.
If you sign and return your proxy card but do not give any
voting instructions, your shares will be voted in favor of the
election of each of the director nominees listed in
Proposal 1 and in favor of Proposals 2, 3 and 4. As
far as we know, no other matters will be presented at the
Meeting. However, if any other matters of business are properly
presented, the proxy holders named on the proxy card are
authorized to vote the shares represented by proxies according
to their judgment.
Whether you submit your proxy via the Internet, by phone or by
mail, you may revoke it at any time before voting takes place at
the Meeting. If you are the record holder of your shares and you
wish to revoke your proxy, you must deliver instructions to:
Laura A. Fennell, Corporate Secretary, at Intuit Inc.,
P.O. Box 7850, Mail Stop 2700, Mountain View,
California
94039-7850.
You may also revoke a proxy by submitting a later-dated vote, in
person at the Meeting. Please note that if a broker, bank or
other nominee is the record holder of your shares and you wish
to vote at the Meeting, you must bring to the Meeting a letter
from the record holder confirming your beneficial ownership of
the shares. If a broker, bank or other nominee is the record
holder of your shares and you wish to revoke your proxy, you
must contact the record holder of your shares directly.
Abstentions
and Broker Non-Votes
Any shares represented by proxies that are marked to abstain
from voting on a proposal will be counted as present in
determining whether we have a quorum. They will also be counted
in determining the total number of shares entitled to vote on a
proposal. A majority of votes cast is required to approve
Proposals 2, 3 and 4. Accordingly, abstentions are not
counted for the purpose of determining the number of votes cast
on these proposals.
If your shares are held in street name and you do not instruct
your broker on how to vote your shares, your broker, in its
discretion, may either leave your shares unvoted or vote your
shares on routine matters. Proposal 1 (election of
directors) and Proposal 2 (ratifying the appointment of our
independent registered public accounting firm) should be treated
as routine matters. If your broker votes on your behalf on these
two proposals, your shares also will be counted as present for
the purpose of determining a quorum. Proposals 3 and 4 are
not considered routine matters, and without your instruction,
your broker cannot vote your shares. If a broker, bank,
custodian, nominee or other record holder of Intuit stock
indicates on a proxy that it does not have discretionary
authority to vote certain shares on a particular matter, these
shares (called broker non-votes) will also be
counted as present in determining whether we have a quorum but
will not be counted for the purpose of determining the number of
votes cast on a specific proposal.
Soliciting
Proxies
Intuit will pay all expenses of soliciting proxies to be voted
at the Meeting. After the proxies are initially distributed,
Intuit
and/or its
agents may also solicit proxies by mail, electronic mail,
telephone or in person. We have hired a proxy solicitation firm,
Innisfree M&A Incorporated, to assist us in soliciting
proxies. We will pay Innisfree a fee of $8,500 plus their
expenses, which we estimate will be approximately $7,500. We
will ask brokers, custodians, nominees and other record holders
to prepare and send a Notice of Internet Availability of Proxy
Materials to people for whom they hold shares and forward copies
of the proxy materials to beneficial owners who request paper
copies.
3
Voting
Results
The preliminary voting results will be announced at the Meeting.
The final voting results will be tallied by our Inspector of
Elections and published in our quarterly report on
Form 10-Q
for the fiscal quarter ending January 31, 2008.
Delivery
of Voting Materials to Stockholders Sharing an Address
To reduce the expense of delivering duplicate materials to
stockholders sharing the same address, we have adopted a
procedure approved by the SEC called householding.
Under this procedure, certain stockholders of record who have
the same address and last name and dont participate in
electronic delivery of proxy materials will receive only one
copy of the Notice of Internet Availability of Proxy Materials,
annual report on
Form 10-K
and proxy materials, as applicable, sent to stockholders until
such time as one or more of these stockholders notifies us that
they wish to continue receiving individual copies. This
procedure will reduce duplicate mailings and save printing costs
and postage fees, as well as natural resources.
How to
Obtain a Separate Set of Voting Materials
If you received a householded mailing this year, and you would
like to have additional copies of our Notice of Internet
Availability of Proxy Materials, annual report on
Form 10-K
and proxy materials, as applicable, mailed to you, please submit
your request to Investor Relations, Intuit Inc.,
P.O. Box 7850, Mail Stop 2700, Mountain View,
California,
94039-7850,
or call
(650) 944-3560.
You may also contact us at the address or phone number above if
you received multiple copies of the annual meeting materials and
would prefer to receive a single copy in the future. If you
would like to opt out of householding for future mailings, call
(800) 542-1061
or send a written request to Investor Relations at the above
address.
Annual
Report on
Form 10-K
and Additional Materials
The Notice of Annual Meeting, this Proxy Statement and our
annual report on
Form 10-K
for the fiscal year ended July 31, 2007 have been made
available to all stockholders entitled to vote at the Annual
Meeting and who received the Notice of Internet Availability of
Proxy Materials. The annual report on
Form 10-K
can also be viewed at www.intuit.com/about_intuit/investors.
Paper copies of our annual report on
Form 10-K
(excluding exhibits) may be obtained without charge by writing
to Investor Relations, Intuit Inc., P.O. Box 7850,
Mail Stop 2700, Mountain View, California,
94039-7850,
or by calling
(650) 944-3560.
OUR
BOARD OF DIRECTORS AND NOMINEES
Our Board currently consists of eleven directors, of whom ten
are standing for election. The nominees for election include
seven independent directors, as defined in the applicable rules
for companies traded on the NASDAQ Global Select Market
(NASDAQ), and three directors who are employees of Intuit.
Stockholders elect all directors annually. In July 2007, Suzanne
Nora Johnson and Edward A. Kangas were appointed to the Board of
Directors upon the recommendation of the Nominating and
Governance Committee, and both directors are standing for
election at the annual meeting. Ms. Nora Johnson was
brought to the attention of the Nominating and Governance
Committee as a candidate by a third-party search firm, which
provided assistance in identifying and evaluating Board
candidates. Mr. Kangas was brought to the attention of the
Nominating and Governance Committee as a candidate by a member
of the Board who is an executive officer of Intuit. In October
2007, we announced that L. John Doerr has decided not to stand
for re-election and is expected to serve as a director until the
date of the annual meeting.
Directors
Standing for Election
The authorized number of directors is currently eleven, and
effective immediately prior to the annual meeting, this number
will be reduced to ten by resolution of the Board, as provided
in our Bylaws. Intuit has announced that
4
on January 1, 2008, Brad D. Smith will become President and
Chief Executive Officer of Intuit and will be appointed as a
director on that date by resolution of the Board, as provided in
our Bylaws.
Each of the incumbent directors listed below has been nominated
for election by the Board of Directors upon recommendation by
the Nominating and Governance Committee and has agreed to stand
for election to a one-year term.
Information concerning the nominees for director is provided
below.
Stephen
M. Bennett (Age 53)
President and Chief Executive Officer, Intuit Inc.
Mr. Bennett has been President and Chief Executive Officer
and a member of Intuits Board of Directors since 2000.
Prior to joining Intuit, Mr. Bennett spent 23 years
with General Electric Corporation. From December 1999 to January
2000, Mr. Bennett was an Executive Vice President and a
member of the board of directors of GE Capital, the financial
services subsidiary of General Electric Corporation. From July
1999 to November 1999, he was President and Chief Executive
Officer of GE Capital
e-Business,
and he was President and Chief Executive Officer of GE Capital
Vendor Financial Services from April 1996 through June 1999.
Mr. Bennett also serves on the board of directors of Sun
Microsystems, Inc. He holds a Bachelor of Arts in Finance and
Real Estate from the University of Wisconsin. On January 1,
2008, Mr. Bennett will be stepping down as President and
Chief Executive Officer, and will remain a member of
Intuits Board of Directors, if re-elected by stockholders
at the annual meeting.
Christopher
W. Brody (Age 62)
Chairman, Vantage Partners LLC
Mr. Brody has been an Intuit director since 1993 and is a
member of the Compensation and Organizational Development
Committee and the Nominating and Governance Committee. He was
also a member of the Audit Committee until October 2007.
Mr. Brody has been Chairman of Vantage Partners LLC, a
private investment firm, since January 1999. From 1971 through
1998, Mr. Brody was a partner of Warburg,
Pincus & Co., a venture capital and private equity
investment firm. Mr. Brody also serves as a director of
several privately held companies. Mr. Brody holds a
Bachelor of Arts in English Literature from Harvard College and
a Master in Business Administration from Harvard Business School.
William
V. Campbell (Age 67)
Chairman of the Board of Directors, Intuit Inc.
Mr. Campbell has been an Intuit director since 1994. He has
served as Chairman of the Board since August 1998 and was Acting
Chief Executive Officer from September 1999 through January
2000. He served as Intuits President and Chief Executive
Officer from April 1994 through July 1998. Mr. Campbell
also serves on the board of directors of Apple Inc. and
Highlands Acquisition Corp., a blank check company formed for
the purpose of acquiring one or more operating businesses.
Mr. Campbell holds a Bachelor of Arts in Economics and a
Masters of Science from Columbia University, where he is Chair
of the Board of Trustees.
Scott D.
Cook (Age 55)
Chairman of the Executive Committee, Intuit Inc.
Mr. Cook, a founder of Intuit, has been an Intuit director
since 1984 and has been Chairman of the Executive Committee
since August 1998. He served as Intuits Chairman of the
Board from February 1993 through July 1998. From April 1984 to
April 1994, he served as Intuits President and Chief
Executive Officer. Mr. Cook also serves on the boards of
directors of eBay Inc. and The Procter & Gamble
Company. Mr. Cook holds a Bachelor of Arts in Economics and
Mathematics from the University of Southern California and a
Master in Business Administration from Harvard Business School.
5
Diane B.
Greene (Age 52)
President and Chief Executive Officer, VMware, Inc.
Ms. Greene has been an Intuit director since August 2006
and is a member of the Audit Committee. She is
co-founder,
President, Chief Executive Officer and a director of VMware,
Inc., a developer and provider of software for virtualized
desktops, servers, storage and networking. Before co-founding
VMware in 1998, Ms. Greene held technical leadership
positions at Silicon Graphics, Tandem, and Sybase and was chief
executive officer of VXtreme. Ms. Greene holds a Bachelor
of Arts in mechanical engineering from the University of
Vermont, a Master of Science degree in naval architecture from
the Massachusetts Institute of Technology and a Master of
Science degree in computer science from the University of
California, Berkeley.
Michael
R. Hallman (Age 62)
President, The Hallman Group
Mr. Hallman has been an Intuit director since 1993 and is
Chairman of the Compensation and Organizational Development
Committee. He was also a member of the Audit Committee until
October 2007. Mr. Hallman has been President of The Hallman
Group, a management consulting firm, since October 1992.
Mr. Hallman was President and Chief Operating Officer of
Microsoft Corporation from March 1990 through April 1992.
Mr. Hallman is also a director of InFocus Corporation, a
maker of computer-operated projection products. Mr. Hallman
holds both a Bachelors and a Masters degree in
Business Administration from the University of Michigan.
Edward A.
Kangas (Age 63)
Non-Executive Chairman, Tenet Healthcare
Mr. Kangas has been a director of Intuit since July 2007.
He has been Chairman of Tenet Healthcare, an owner and operator
of acute care hospitals and related healthcare services, since
July 2003 and has served as a director since April 2003. From
1989 to 2000, Mr. Kangas was global chairman and Chief
Executive Officer of Deloitte Touche Tohmatsu, a global provider
of audit, tax, consulting and financial advisory services. He
also served as the managing partner of Deloitte &
Touche (USA) from 1989 to 1994. Mr. Kangas is also a
director of Eclipsys Corporation, Electronic Data Systems
Corporation and Hovnanian Enterprises, Inc. He holds a
Bachelors degree and a Masters degree in Business
Administration from the University of Kansas.
Suzanne
Nora Johnson (Age 50)
Senior Director, The Goldman Sachs Group
Ms. Nora Johnson has been a director of Intuit since July
2007. Since 1985, she has held senior management and other
positions with The Goldman Sachs Group, a leading global
investment banking, securities and investment management firm.
Before becoming a Senior Director, she was Vice Chairman of the
firm, Chairman of the firms global markets institute, head
of the global investment research division, and a member of the
firms management committee. Ms. Nora Johnson also
serves on the boards of Pfizer Inc., a research-based biomedical
and pharmaceutical company, and Visa Inc., a provider of
products, services and infrastructure supporting global
commerce. Her non-profit board affiliations include, among
others, the American Red Cross, Brookings Institution,
Carnegie Institution of Washington, Markle Foundation and
the University of Southern California. Ms. Nora Johnson
earned a Bachelors degree from the University of Southern
California and a Juris Doctor from Harvard Law School.
Dennis D.
Powell (Age 59)
Senior Vice President, Chief Financial Officer, Cisco Systems,
Inc.
Mr. Powell has been an Intuit director since 2004 and is
the Chairman of the Audit Committee. He joined Cisco Systems, a
provider of networking products and services, in 1997 and has
served as the Senior Vice President and Chief Financial Officer
since May 2003. From January 1997 to June 2002, he was
Ciscos Vice President, Corporate Controller, and from June
2002 to May 2003, he was Senior Vice President, Corporate
Finance. Prior to joining Cisco, Mr. Powell was employed by
Coopers & Lybrand LLP for 26 years, most recently
as a senior partner. Mr. Powell also serves on the board of
Applied Materials, Inc., a provider of fabrication services,
equipment and software. Mr. Powell holds a Bachelor of
Science in Business Administration with a concentration in
accounting from Oregon State University.
6
Stratton
D. Sclavos (Age 46)
Former President, Chief Executive Officer and Chairman,
VeriSign, Inc.
Mr. Sclavos has been an Intuit director since 2001 and is a
member of the Nominating and Governance Committee. He most
recently served as President, Chief Executive Officer and a
director of VeriSign, Inc., a provider of intelligent
infrastructure services for networks, from July 1995 to May 2007
and as Chairman of Verisigns board of directors from
December 2001 to May 2007. Mr. Sclavos is also a director
of Juniper Networks, Inc., an internet infrastructure systems
provider, and Salesforce.com, Inc., a provider of customer
relationship management services. Mr. Sclavos holds a
Bachelor of Science in Electrical and Computer Engineering from
the University of California, Davis.
Our Board has adopted Corporate Governance Principles that are
designed to assist the Board in observing practices and
procedures that serve the best interests of Intuit and our
stockholders. The Nominating and Governance Committee is
responsible for overseeing these Principles and periodically
making recommendations to the Board regarding any changes. These
Principles address, among other things, our policy on
retirement, succession planning and senior leadership
development, Board performance evaluations, committee structure
and stock ownership requirements.
We maintain a corporate governance page on our company website
that includes key information about corporate governance
matters, including copies of our Corporate Governance
Principles, our code of conduct and ethics for all employees,
including our companys senior executive and financial
officers, our Board Code of Ethics and the charter for each
Board committee. The link to this corporate governance page can
be found at
www.intuit.com/about_intuit/investors/corporate_gov.
Board
Responsibilities and Structure
The Board oversees managements performance on behalf of
Intuits stockholders. The Boards primary
responsibilities are (1) to select, oversee and determine
compensation for the Chief Executive Officer who, with senior
management, runs Intuit on a day-to-day basis, (2) to
monitor managements performance to assess whether Intuit
is operating in an effective, efficient and ethical manner in
order to create value for Intuits stockholders, and
(3) to periodically review Intuits long-range plan,
business initiatives, capital projects and budget matters.
The Board appoints the Chairman of the Board, who may be a
current or former officer of Intuit if the Board determines that
it is in the best interests of Intuit and its stockholders.
However, if the Chairman is also the Chief Executive Officer,
then the Board has determined that it will appoint a lead
independent director. William V. Campbell, the
current Chairman of the Board, is an employee of Intuit and
previously served as Intuits chief executive officer.
The Board and its committees meet throughout the year on a set
schedule, and also hold special meetings and act by written
consent from time to time as appropriate. The Board held ten
meetings during fiscal 2007 and also acted by written consent.
The independent directors meet without management present at
regularly scheduled executive sessions at each quarterly Board
meeting. During fiscal 2007, the independent directors held four
executive sessions. With respect to independent director
sessions, the independent directors may from time to time
designate an independent director to serve as presiding director
to chair these sessions. In addition, the presiding director may
advise the Chairman of the Board with respect to agendas and
information to be provided to the Board and may perform such
other duties as the Board may from time to time delegate to
assist it in fulfilling its responsibilities. The Board has
delegated certain responsibilities and authority to the
committees described below. Committees report regularly on their
activities and actions to the full Board.
Our Board currently includes eight independent directors, seven
of whom are standing for election. To be considered independent
under NASDAQ rules, a director may not be employed by Intuit or
engage in certain types of business dealings with Intuit. In
addition, as required by NASDAQ rules, the Board has made a
determination as to each independent director that no
relationship exists which, in the opinion of the Board, would
interfere with the
7
exercise of independent judgment in carrying out the
responsibilities of a director. In making these determinations,
the Board reviewed and discussed information provided by the
directors and by the company with regard to each directors
business and personal activities as they relate to Intuit and
Intuits management. Based on this review, the Board has
determined that Mr. Brody, Mr. Doerr, Ms. Greene,
Mr. Hallman, Mr. Kangas, Ms. Nora Johnson,
Mr. Powell and Mr. Sclavos are independent directors.
Mr. Bennett, Mr. Campbell and Mr. Cook are
employees of Intuit and are therefore not considered independent.
In assessing director independence under NASDAQ rules, the
Nominating and Governance Committee and the full Board review
relevant transactions, relationships and arrangements that may
affect the independence of our Board members. Mr. Doerr,
Ms. Greene, Ms. Nora Johnson, Mr. Powell and
Mr. Sclavos are, or were during fiscal 2007, directors or
executive officers of companies with which Intuit conducts
business in the ordinary course. Consistent with NASDAQ
independence standards, Intuit did not make payments to, or
receive payments from, any of these companies for property or
services in the current or any of the last 3 fiscal years that
exceed 5% of Intuits or any of the other parties
consolidated gross revenues. Mr. Kangas sits on the board
of a charitable foundation to which Intuit has made employee
matching contributions in amounts that are immaterial to both
Intuit and the foundation. Following review of these
transactions and other relevant standards, the Board determined
that each of these directors is independent under NASDAQ rules.
Attendance
at Board, Committee and Annual Stockholders Meetings
The Board expects that each director will prepare for, attend
and participate in all Board and applicable committee meetings
and that each Board member will see that other commitments do
not materially interfere with his or her service on the Board.
Directors generally may not serve on the boards of more than six
public companies, including Intuits board. Any director
who has a principal job change, including retirement, must offer
to submit a letter of resignation to the Chairman of the Board.
The Board, in consultation with the Nominating and Governance
Committee, will review each offered resignation and determine
whether or not to accept such resignation after consideration of
the continued appropriateness of Board membership under the new
circumstances.
No director attended less than 75% of the aggregate number of
meetings of the Board and the committees on which he or she
served. Three directors attended the 2006 Annual Meeting of
Stockholders. Under the Corporate Governance Principles, all
directors are encouraged to attend the annual meetings of
Intuits stockholders.
Board
Committees and Charters
The Board currently has a standing Audit Committee, Compensation
and Organizational Development Committee and Nominating and
Governance Committee. The members of each committee are
appointed by the Board based on recommendations of the
Nominating and Governance Committee. Each member of these
committees is an independent director as determined by the Board
in accordance with NASDAQ listing standards. Each committee has
a charter and annually reviews its charter and makes
recommendations to our Board for revision of its charter to
reflect evolving best practices. Copies of each charter can be
found on our website at
www.intuit.com/about_intuit/investors/corporate_gov.
Current committee members are identified in the following
table.
|
|
|
|
|
|
|
|
|
|
|
Compensation and
|
|
|
|
|
|
|
Organizational
|
|
Nominating and
|
|
|
Audit
|
|
Development
|
|
Governance
|
Director
|
|
Committee
|
|
Committee
|
|
Committee
|
|
Stephen M. Bennett
|
|
|
|
|
|
|
Christopher W. Brody
|
|
|
|
X
|
|
X
|
William V. Campbell
|
|
|
|
|
|
|
Scott D. Cook
|
|
|
|
|
|
|
L. John Doerr
|
|
|
|
|
|
X
|
Diane B. Greene
|
|
X
|
|
|
|
|
Michael R. Hallman
|
|
|
|
Chair
|
|
|
Edward A. Kangas
|
|
|
|
X
|
|
|
Suzanne Nora Johnson
|
|
X
|
|
|
|
|
Dennis D. Powell
|
|
Chair
|
|
|
|
|
Stratton D. Sclavos
|
|
|
|
|
|
X
|
8
The Audit Committee represents and assists the Board in its
oversight of Intuits financial reporting, internal
controls and audit functions, and is directly responsible for
the selection, retention, compensation and oversight of the work
of Intuits independent auditor.
Our Board has determined that each member of the Audit Committee
is independent, as defined under applicable NASDAQ listing
standards and SEC rules related to audit committee members, and
is financially literate, as required by NASDAQ listing
standards. The Audit Committee also includes at least one member
Dennis D. Powell who has been determined
by the Board to meet the qualifications of an audit
committee financial expert, as defined by SEC rules, and
to meet the qualifications of financial
sophistication in accordance with NASDAQ listing
standards. Stockholders should understand that these
designations related to an Audit Committee members
experience and understanding do not impose upon him or her any
duties, obligations or liabilities greater than those generally
imposed on other members of the Audit Committee or the Board.
In fiscal 2007, the Audit Committee held 12 meetings and also
acted by written consent. The responsibilities and activities of
the Audit Committee are described in greater detail in
Report of the Audit Committee beginning on
page 40.
Compensation
and Organizational Development Committee
The Compensation and Organizational Development Committee
assists the Board in the review and approval of executive
compensation and the oversight of organizational and management
development for executive officers and other employees of
Intuit. Each member of this committee is independent under
NASDAQ listing standards and is an outside director
as defined in the Internal Revenue Code of 1986, as amended (the
Code), and a
Non-Employee
Director, as defined in
Rule 16(b)-3
under the Securities Exchange Act of 1934. The committee met 11
times in fiscal 2007 and also acted by written consent. The
Compensation Committee held a portion of each meeting in closed
session, with only the Compensation Committee members and, on
certain occasions, William Campbell, the Chairman of the Board,
and representatives of our outside compensation consultant,
present. For more information, see the Compensation
Committee Report on page 17 and Compensation
Discussion and Analysis beginning on page 17.
In connection with the acquisition of Digital Insight
Corporation in February 2007, the Board established a special
compensation committee to approve the compensation and
employment agreement for Mr. Stiefler, the former Chief
Executive Officer of Digital Insight, and equity awards for
certain other former employees of Digital Insight. This special
committee, which completed its work and was dissolved in March
2007, consisted solely of independent disinterested directors,
and did not include Mr. Hallman, who was also a member of
the Digital Insight board through February 2007. This special
committee did not have a written charter.
Nominating
and Governance Committee
The Nominating and Governance Committee reviews and makes
recommendations to the Board regarding Board composition and
appropriate governance standards. The Nominating and Governance
Committee held two meetings in fiscal 2007 and also acted by
written consent.
The Committee has adopted a process to identify and evaluate
candidates for director, whether recommended by management,
Board members, or stockholders (if made in accordance with the
procedures set forth under Stockholder Recommendations of
Director Candidates below). The committee will evaluate
candidates properly recommended by stockholders in the same
manner as candidates recommended by others. The committee
believes that all nominees for Board membership should possess
the highest ethics, integrity and values and be committed to
representing the long-term interests of Intuits
stockholders. In addition, nominees should have broad,
high-level experience in business, government, education,
technology or public interest. They should also have sufficient
time to carry out their duties as directors of Intuit and have
an inquisitive and objective perspective, practical wisdom and
mature judgment. The committee will also consider additional
factors such as independence, diversity, expertise
and specific skills, and other qualities that may contribute to
the Boards overall effectiveness when
evaluating
9
candidates for director. Intuit may also engage third-party
search firms to provide assistance in identifying and evaluating
Board candidates.
Consideration of director candidates typically involves a series
of discussions, a review of available information concerning the
candidate, qualifications for Board membership established by
the Nominating and Governance Committee, the existing
composition of the Board, and other factors the committee deems
relevant. In conducting its review and evaluation, the committee
may solicit the views of management, other Board members and
other individuals it believes may have insight into a
candidates qualifications.
Compensation
Committee Interlocks and Insider Participation
No executive officer of Intuit during fiscal 2007 served, or
currently serves, as a member of the board of directors or
compensation committee of any entity that has one or more
executive officers serving on Intuits Board or
Intuits Compensation and Organizational Development
Committee.
Our non-employee directors receive a combination of equity and
cash compensation for serving on our Board. Our three directors
who are company employees Mr. Bennett,
Mr. Cook and Mr. Campbell do not receive
board fees or equity for their Board service. The Compensation
and Organizational Development Committee is responsible for
reviewing the equity and cash compensation for non-employee
directors on an annual basis and making recommendations to the
Board, in the event they determine changes are needed. The
Compensation and Organizational Development Committee last
reviewed non-employee director compensation in July 2007 and
determined that the current mix and size of equity and cash
awards provide the appropriate incentive to attract and retain
qualified non-employee board members. The following table
summarizes the fiscal 2007 compensation earned by each member of
the Board other than Mr. Bennett, whose compensation is
described under Executive Compensation beginning on
page 27.
Director
Summary Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fees Earned
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
or Paid in
|
|
|
Option
|
|
|
Compensation
|
|
|
|
|
Director Name
|
|
Cash ($)
|
|
|
Awards ($)(1)
|
|
|
($)
|
|
|
Total ($)
|
|
|
Christopher W. Brody
|
|
|
60,000
|
|
|
|
247,091
|
|
|
|
|
|
|
|
307,091
|
|
William V. Campbell
|
|
|
|
|
|
|
|
|
|
|
1,759,382
|
(2)
|
|
|
1,759,382
|
|
Scott D. Cook
|
|
|
|
|
|
|
|
|
|
|
909,388
|
(3)
|
|
|
909,388
|
|
L. John Doerr
|
|
|
40,000
|
|
|
|
198,544
|
|
|
|
|
|
|
|
238,544
|
|
Donna L. Dubinsky(4)
|
|
|
11,250
|
|
|
|
(13,960
|
)
|
|
|
|
|
|
|
(2,710
|
)
|
Diane B. Greene
|
|
|
45,000
|
|
|
|
180,981
|
|
|
|
|
|
|
|
225,981
|
|
Michael R. Hallman
|
|
|
60,000
|
|
|
|
247,091
|
|
|
|
|
|
|
|
307,091
|
|
Edward A. Kangas
|
|
|
11,250
|
|
|
|
3,977
|
|
|
|
|
|
|
|
15,227
|
|
Suzanne Nora Johnson
|
|
|
11,250
|
|
|
|
3,977
|
|
|
|
|
|
|
|
15,227
|
|
Dennis D. Powell
|
|
|
60,000
|
|
|
|
319,455
|
|
|
|
|
|
|
|
379,455
|
|
Stratton D. Sclavos
|
|
|
40,000
|
|
|
|
194,396
|
|
|
|
|
|
|
|
234,396
|
|
|
|
|
(1) |
|
Amounts included in the Option Awards column above reflect total
option-related expense recognized for financial statement
reporting purposes for the fiscal year ended July 31, 2007
in accordance with Statement of Financial Accounting Standards
No. 123R (SFAS 123R), assuming no forfeitures. In the
case of an actual forfeiture due to termination of services, we
have reduced the expense based on that forfeiture. The amounts
in this column differ from amounts in the following table titled
Option Grants to Non-Employee Directors During Fiscal Year
2007, because that table includes the full fair value as
of the grant date (calculated in |
10
|
|
|
|
|
accordance with SFAS 123R) of options granted during fiscal
2007 only, irrespective of the years in which option-related
expense is recognized. |
|
|
|
(2) |
|
Mr. Campbell is a full-time employee of Intuit. His
compensation represents an annual salary of $492,382; an
incentive bonus of $600,000 awarded for service in fiscal 2007;
and a contribution of $667,000 made by Intuit to a donor-advised
charitable fund in the name of Mr. Campbell and his wife.
Mr. Campbell did not receive equity awards from Intuit
during fiscal 2007. |
|
(3) |
|
Mr. Cook is a full-time employee of Intuit. His
compensation represents an annual salary of $500,000; an
incentive bonus of $400,000 awarded for service in fiscal 2007;
a patent invention bonus of $4,750; and payment of premiums for
executive long-term disability insurance of $4,638.
Mr. Cook did not receive equity awards from Intuit during
fiscal 2007. |
|
(4) |
|
Ms. Dubinsky left the Board in December 2006. The value of
Ms. Dubinskys option awards is negative because of
the effects of forfeitures when she left the Board. |
Option
Grants to Non-Employee Directors During Fiscal Year
2007
The following table shows each option grant made to our
non-employee directors during fiscal 2007, including the grant
date, number of shares, exercise price, and grant date fair
value, as calculated under SFAS 123R. All options have an
exercise price equal to the fair market value of Intuits
common stock on the date of grant.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares Subject
|
|
|
Exercise
|
|
|
Grant Date
|
|
Director Name
|
|
Grant Date
|
|
|
to Option (#)
|
|
|
Price ($)
|
|
|
Fair Value ($)
|
|
|
Christopher W. Brody
|
|
|
11/25/2006
|
|
|
|
22,500
|
|
|
|
31.79
|
|
|
|
178,074
|
|
|
|
|
1/18/2007
|
|
|
|
7,500
|
|
|
|
31.18
|
|
|
|
61,793
|
|
|
|
|
1/18/2007
|
|
|
|
7,500
|
|
|
|
31.18
|
|
|
|
61,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
37,500
|
|
|
|
|
|
|
|
301,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
L. John Doerr
|
|
|
11/25/2006
|
|
|
|
22,500
|
|
|
|
31.79
|
|
|
|
178,074
|
|
|
|
|
12/12/2006
|
|
|
|
7,500
|
|
|
|
30.59
|
|
|
|
60,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
238,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diane B. Greene
|
|
|
8/15/2006
|
|
|
|
67,500
|
|
|
|
31.11
|
|
|
|
547,425
|
|
|
|
|
8/15/2006
|
|
|
|
7,500
|
|
|
|
31.11
|
|
|
|
51,975
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
599,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Michael R. Hallman
|
|
|
11/25/2006
|
|
|
|
22,500
|
|
|
|
31.79
|
|
|
|
178,074
|
|
|
|
|
1/18/2007
|
|
|
|
7,500
|
|
|
|
31.18
|
|
|
|
61,793
|
|
|
|
|
1/18/2007
|
|
|
|
7,500
|
|
|
|
31.18
|
|
|
|
61,793
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
37,500
|
|
|
|
|
|
|
|
301,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Edward A. Kangas
|
|
|
7/24/2007
|
|
|
|
67,500
|
|
|
|
29.97
|
|
|
|
605,198
|
|
|
|
|
7/24/2007
|
|
|
|
7,500
|
|
|
|
29.97
|
|
|
|
56,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
661,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Suzanne Nora Johnson
|
|
|
7/24/2007
|
|
|
|
67,500
|
|
|
|
29.97
|
|
|
|
605,198
|
|
|
|
|
7/24/2007
|
|
|
|
7,500
|
|
|
|
29.97
|
|
|
|
56,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
75,000
|
|
|
|
|
|
|
|
661,537
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis D. Powell
|
|
|
2/19/2007
|
|
|
|
22,500
|
|
|
|
30.96
|
|
|
|
180,239
|
|
|
|
|
2/19/2007
|
|
|
|
10,000
|
|
|
|
30.96
|
|
|
|
82,769
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
32,500
|
|
|
|
|
|
|
|
263,008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stratton D. Sclavos
|
|
|
8/1/2006
|
|
|
|
22,500
|
|
|
|
29.92
|
|
|
|
162,675
|
|
|
|
|
12/12/2006
|
|
|
|
7,500
|
|
|
|
30.59
|
|
|
|
60,203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
30,000
|
|
|
|
|
|
|
|
222,878
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11
Outstanding
Option Awards for Directors at Fiscal Year-End 2007 (Exercisable
and Unexercisable)
The following table provides information on the outstanding
equity awards for our directors, other than Mr. Bennett, as
of July 31, 2007.
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Shares Subject
|
|
|
|
to Outstanding
|
|
Director Name
|
|
Options (#)
|
|
|
Christopher W. Brody
|
|
|
497,500
|
|
William V. Campbell
|
|
|
720,000
|
|
Scott D. Cook
|
|
|
201,000
|
|
L. John Doerr
|
|
|
430,000
|
|
Diane B. Greene
|
|
|
75,000
|
|
Michael R. Hallman
|
|
|
497,500
|
|
Edward A. Kangas
|
|
|
75,000
|
|
Suzanne Nora Johnson
|
|
|
75,000
|
|
Dennis D. Powell
|
|
|
212,500
|
|
Stratton D. Sclavos
|
|
|
289,000
|
|
Annual
Retainer for Non-Employee Directors
Non-employee directors are paid an annual cash retainer of
$30,000, plus additional cash retainers based on their committee
service. These annual retainers are paid in quarterly
installments and are listed in the following table:
|
|
|
|
|
|
|
Annual
|
|
Position
|
|
Amount ($)
|
|
|
Board Member
|
|
|
30,000
|
|
Chair of Audit Committee
|
|
|
30,000
|
|
Member of Audit Committee or Compensation and Organizational
Development Committee
|
|
|
15,000
|
|
Nominating and Governance Committee Member
|
|
|
10,000
|
|
We reimburse non-employee directors for out-of-pocket expenses
incurred in connection with attending Board and committee
meetings.
12
Automatic
Option Grants to Non-Employee Directors Under the 2005 Equity
Incentive Plan
All options granted to non-employee directors in fiscal year
2007 were made pursuant to a stockholder-approved
non-discretionary formula set forth in our 2005 Equity Incentive
Plan (the Plan), which our stockholders approved in
December 2004 and amended in 2005 and 2006. The Board
subsequently amended the Plan on July 26, 2006, to reduce
the number of shares subject to the options granted to directors
for service on the board or a committee under the formula by
25%, except for the size of each option grant awarded for a
directors service as a board-designated Committee chair.
The exercise price for each option granted to a non-employee
director is the fair market value of Intuits stock on the
grant date. Pursuant to the terms of the Plans
non-discretionary formula, each initial option grant is granted
on the date a non-employee board member first becomes a member
of the Board, each succeeding annual grant is granted on the
anniversary of such date and each option grant awarded for
committee service is granted on the date the non-employee board
member is appointed to a committee or the anniversary thereof.
The automatic option grant amounts are as set forth in the
following table:
|
|
|
|
|
|
|
Shares Subject
|
|
Non-Employee Board Position
|
|
to Option (#)
|
|
|
New Board Member (on date of joining Board)
|
|
|
67,500
|
|
Continuing Board Member (annual grant)
|
|
|
22,500
|
|
Board-designated Chair of Audit Committee, Compensation and
Organizational Development Committee or Nominating and
Governance Committee (annual grant)
|
|
|
10,000
|
|
Other Committee Members (annual grant)
|
|
|
7,500
|
|
Initial non-employee director grants vest over four years, with
25% of the option shares vesting on the first anniversary of the
grant date and the remaining 75% of the shares vesting pro rata
over the next 36 months. Succeeding annual non-employee
director grants vest over two years, with 50% of the option
shares vesting on the first anniversary of the grant date and
the remaining 50% vesting pro rata over the next 12 months.
Committee grants vest pro rata over 12 months and are fully
vested on the first anniversary of the grant date. The grants
vest only while the recipient remains in service.
Director
Stock Ownership Requirement
Each director is required to hold at least 10,000 shares of
Intuit common stock by the later of July 2011 or five years from
the date the director joined the Board. The shares must then be
held throughout the directors tenure on the Board. If any
director does not meet the stock ownership requirement within
the designated time frame, 50% of his or her annual cash
retainers will be made in the form of Intuit stock until
compliance is achieved.
Stockholder
Communications with the Board
The Nominating and Governance Committee is responsible for
receiving stockholder communications on behalf of the Board. Any
stockholder may send communications by mail to the Board or
individual directors
c/o Corporate
Secretary, Intuit Inc., P.O. Box 7850, Mail Stop 2700,
Mountain View, California
94039-7850
or via our website at
www.intuit.com/about_intuit/investors/corporate_gov. The
Board has instructed the Corporate Secretary to review this
correspondence and determine, in his or her discretion, whether
matters submitted are appropriate for Board consideration. The
Corporate Secretary may also forward certain communications
elsewhere in the company for review and possible response. In
particular, communications such as product or commercial
inquiries or complaints, job inquiries, surveys and business
solicitations or advertisements or patently offensive or
otherwise inappropriate material will not be forwarded to the
Board.
Stockholder
Recommendations of Director Candidates
As discussed above, our Nominating and Governance Committee will
consider director candidates recommended by a stockholder. A
stockholder seeking to recommend a candidate for the
committees consideration
13
should submit the candidates name and qualifications to:
Nominating and Governance Committee,
c/o Corporate
Secretary, Intuit Inc., P.O. Box 7850, Mail Stop 2700,
Mountain View, California
94039-7850
or via our website at
www.intuit.com/about_intuit/investors/corporate_gov. You
may also find a copy of a document entitled Process of
Identifying and Evaluating Nominees for Director on that
web page.
Stockholder
Proposals and Nominations for the 2008 Annual Meeting of
Stockholders
Any stockholder who intends to present a proposal for inclusion
in Intuits 2008 proxy statement and form of proxy must
submit the proposal, in writing, so that the Corporate Secretary
receives it at our principal executive offices by July 5,
2008. Any stockholder who wishes to bring a proposal or nominate
a person for election to the Board at the 2008 Annual Meeting of
Stockholders must provide written notice of the proposal or
nomination to Intuits Corporate Secretary, at our
principal executive offices, between August 31, 2008 and
September 30, 2008. In addition, our stockholders must
comply with the procedural requirements in our bylaws, which
stockholders can obtain from us upon request. Our bylaws are
also on file with the SEC.
14
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Security
Ownership Table
The following table shows shares of Intuits common stock
that we believe are owned as of September 30, 2007 by:
|
|
|
|
|
Each Named Executive Officer (defined on page 27),
|
|
|
|
Each director,
|
|
|
|
All current directors and executive officers as a group, and
|
|
|
|
Each stockholder owning more than 5% of our common stock.
|
Unless indicated in the notes, each stockholder has sole voting
and investment power for all shares shown, subject to community
property laws that may apply to create shared voting and
investment power. Unless indicated in the notes, the address of
each beneficial owner is
c/o Intuit
Inc., P.O. Box 7850, Mountain View, California
94039-7850.
We calculated the Percent of Class based on
338,123,389 shares of common stock outstanding on
September 30, 2007. In accordance with SEC regulations, we
also include (1) shares subject to options that are
currently exercisable or will become exercisable within
60 days of September 30, 2007 and (2) shares
issuable upon settlement of restricted stock units that are
vested, or will become vested within 60 days of
September 30, 2007. Those shares are deemed to be
outstanding and beneficially owned by the person holding such
option for the purpose of computing the percentage ownership of
that person, but they are not treated as outstanding for the
purpose of computing the percentage ownership of any other
person.
|
|
|
|
|
|
|
|
|
|
|
Amount and
|
|
|
|
|
|
|
Nature of Beneficial
|
|
|
Percent of
|
|
Name of Beneficial Owner
|
|
Ownership
|
|
|
Class
|
|
|
Directors and Named Executive Officers:
|
|
|
|
|
|
|
|
|
Scott D. Cook(1)
|
|
|
25,118,244
|
|
|
|
7.4
|
%
|
Stephen M. Bennett(2)
|
|
|
5,026,753
|
|
|
|
1.5
|
%
|
Kiran M. Patel(3)
|
|
|
644,004
|
|
|
|
*
|
|
Robert B. Henske(4)
|
|
|
678,611
|
|
|
|
*
|
|
Alexander M. Lintner(5)
|
|
|
65,380
|
|
|
|
*
|
|
Brad D. Smith(6)
|
|
|
532,636
|
|
|
|
*
|
|
Jeffrey E. Stiefler(7)
|
|
|
1,392
|
|
|
|
*
|
|
Christopher W. Brody(8)
|
|
|
873,750
|
|
|
|
*
|
|
William V. Campbell(9)
|
|
|
870,588
|
|
|
|
*
|
|
L. John Doerr(10)
|
|
|
872,187
|
|
|
|
*
|
|
Diane B. Greene(11)
|
|
|
30,468
|
|
|
|
*
|
|
Michael R. Hallman(12)
|
|
|
630,006
|
|
|
|
*
|
|
Edward A. Kangas(13)
|
|
|
2,500
|
|
|
|
*
|
|
Suzanne Nora Johnson(14)
|
|
|
2,500
|
|
|
|
*
|
|
Dennis D. Powell(15)
|
|
|
178,125
|
|
|
|
*
|
|
Stratton D. Sclavos(16)
|
|
|
285,937
|
|
|
|
*
|
|
All current directors and executive officers as a group
(20 people)(17)
|
|
|
36,074,131
|
|
|
|
10.4
|
%
|
Other 5% Stockholders:
|
|
|
|
|
|
|
|
|
Barclays Global Investors, NA(18)
|
|
|
28,479,499
|
|
|
|
8.4
|
%
|
PRIMECAP Management Company(19)
|
|
|
21,923,414
|
|
|
|
6.5
|
%
|
|
|
|
* |
|
Indicates ownership of 1% or less. |
|
(1) |
|
Includes 24,917,244 shares held by trusts, of which
Mr. Cook is a trustee, and 201,000 shares issuable
upon exercise of options. |
15
|
|
|
(2) |
|
Includes 4,300,000 shares issuable upon exercise of options
held by Mr. Bennett, 680,000 vested restricted stock units
for which shares have not been issued and 45,000 unvested
restricted shares that are subject to a lapsing right of
repurchase. |
|
(3) |
|
Includes 638,004 shares issuable upon exercise of options
and upon settlement of vested restricted stock units held by
Mr. Patel. |
|
(4) |
|
Includes 678,411 shares issuable upon exercise of options
held by Mr. Henske. |
|
(5) |
|
Includes 57,995 shares issuable upon exercise of options
and upon settlement of vested restricted stock units held by
Mr. Lintner. |
|
(6) |
|
Includes 527,179 shares issuable upon exercise of options
and upon settlement of vested restricted stock units held by
Mr. Smith. |
|
(7) |
|
Represents shares issuable upon settlement of vested restricted
stock units held by Mr. Stiefler. |
|
(8) |
|
Includes 438,750 shares issuable upon exercise of options
held by Mr. Brody. Vantage Partners Inc., of which
Mr. Brody is chairman and a stockholder, holds
300,000 shares. |
|
(9) |
|
Includes 720,000 shares issuable upon exercise of options
held by Mr. Campbell. |
|
(10) |
|
Includes 373,125 shares issuable upon exercise of options
held by Mr. Doerr. A trust of which Mr. Doerr is a
co-trustee holds the remaining 499,062 shares. |
|
(11) |
|
Represents shares issuable upon exercise of options held by
Ms. Greene. |
|
(12) |
|
Includes 438,750 shares issuable upon exercise of options
held by Mr. Hallman. A family partnership of which
Mr. Hallman is a partner holds 175,200 shares. |
|
(13) |
|
Represents shares issuable upon exercise of options held by
Mr. Kangas. |
|
(14) |
|
Represents shares issuable upon exercise of options held by
Ms. Nora Johnson. |
|
(15) |
|
Represents shares issuable upon exercise of options held by
Mr. Powell. |
|
(16) |
|
Includes 279,937 shares issuable upon exercise of options
held by Mr. Sclavos. A trust of which Mr. Sclavos is a
co-trustee holds the remaining 6,000 shares. |
|
(17) |
|
Includes 9,797,861 shares issuable upon exercise of options
and upon settlement of vested restricted stock units, and 45,000
unvested restricted shares subject to a lapsing right of
repurchase. Represents shares and options held by the
individuals described in Notes 1 3 and
Notes 5 16, plus an additional 11,525
outstanding shares and 928,136 shares issuable upon
exercise of options and upon settlement of vested restricted
stock units held by other executive officers. |
|
(18) |
|
Ownership information for Barclays Global Investors, NA, et. al.
(Barclays) is based on a Schedule 13G filed
with the SEC by Barclays and certain related entities, reporting
ownership as of December 31, 2006. Barclays reported sole
voting power as to 18,535,984 shares and sole dispositive
power as to 21,888,175 shares. The address of Barclays is
45 Fremont Street, San Francisco, California 94105. |
|
(19) |
|
Ownership information for PRIMECAP Management Company
(PRIMECAP) is based on a Schedule 13G filed
with the SEC by PRIMECAP, reporting ownership as of
December 31, 2006. PRIMECAP reported sole voting power as
to 4,472,314 shares and sole dispositive power as to
21,923,414 shares. The address of PRIMECAP is 225 South
Lake Ave. #400, Pasadena, California 91101. |
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act requires
Intuits directors, executive officers, and
greater-than-10% stockholders to file forms with the SEC to
report their ownership of Intuit shares and any changes in
ownership. Anyone required to file forms with the SEC must also
send copies of the forms to Intuit. We have reviewed all forms
provided to us. Based on that review and on written information
given to us by our executive officers and directors, we believe
that all Section 16(a) filing requirements were met during
fiscal 2007.
16
COMPENSATION
AND ORGANIZATIONAL DEVELOPMENT COMMITTEE REPORT
Set out below is the Compensation Discussion and Analysis, which
is a discussion of Intuits executive compensation programs
and polices written from the perspective of how we and
management view and use such policies and programs. We strive to
ensure that Intuits compensation programs are fiscally
responsible, market responsive and performance based. Guided by
these principles we continuously review and monitor senior
managements compensation, as well as their development, to
produce the greatest value for Intuits three
stakeholders employees, customers and stockholders.
To this end, the Compensation Committee has reviewed the
components of compensation paid to each of Intuits
officers for fiscal 2007, including annual base salary, target
incentive bonus and equity compensation.
Given our role in providing guidance on program design,
administering those programs and policies, and in making
specific compensation decisions for senior executives, the
Compensation and Organizational Development Committee
participated in the preparation of the Compensation Discussion
and Analysis and reviewed and discussed the Compensation
Discussion and Analysis with management. Based on the review and
discussions, we recommended to the Board that the Compensation
Discussion and Analysis be included in this proxy statement.
Michael R. Hallman (Chair)
Christopher W. Brody
Edward A. Kangas
COMPENSATION
DISCUSSION AND ANALYSIS
The Compensation and Organizational Development Committee (the
Compensation Committee) administers Intuits
executive compensation program. To that end, the Compensation
Committee oversees Intuits compensation plans and
policies, reviews and approves compensation decisions for
officers and administers Intuits stock compensation plans.
The Compensation Committee focuses primarily on rewarding four
areas of performance: revenue growth, operating income growth,
creating a great place to work and developing talent to ensure
the continued growth of Intuit. To accomplish this, the
Compensation Committee believes that performance-based
compensation is a key success factor because it emphasizes
improvements in these measures. Our position has been to provide
the compensation necessary to acquire and retain talented
executives with proven experience in accomplishing these
objectives and incentive bonus opportunities that are tied to
the successful accomplishment of our operating goals. We manage
long-term compensation tightly to ensure an appropriate dilution
level and to provide competitive rewards that are commensurate
with results delivered. Toward that end, we grant equity awards
in the form of restricted stock units and stock options. The
majority of the restricted stock units granted to our senior
executives vest only upon achievement of our designated goals.
The stock options granted only provide value to the extent
Intuits stock price increases following the date of grant.
As described further below, the Compensation Committee
considered Intuits fiscal 2007 financial performance in
making compensation decisions for our senior executives.
In summary, our fiscal 2007 financial results were excellent,
including:
|
|
|
|
|
Net revenue growth of 17% over fiscal 2006
|
|
|
|
Non-GAAP* operating income increased 17% over fiscal 2006
|
|
|
|
Non-GAAP* diluted earnings per share increased 18% over fiscal
2006
|
* For
a quantitative reconciliation of these non-GAAP financial
measures to the most directly comparable financial measures
prepared in accordance with GAAP, see Appendix A to this
Proxy Statement.
17
Those senior executives listed in the Summary Compensation Table
in this proxy statement whose compensation is discussed in this
CD&A are referred to as the Named Executive
Officers. For fiscal 2007, our Named Executive Officers
are:
|
|
|
|
|
Stephen M. Bennett, President and Chief Executive Officer
|
|
|
|
Kiran M. Patel, Senior Vice President, Consumer Tax Group and
Chief Financial Officer
|
|
|
|
Brad D. Smith, Senior Vice President, Small Business Division
|
|
|
|
Alexander M. Lintner, Senior Vice President,
Strategy & Corporate Development
|
|
|
|
Jeffrey E. Stiefler, Chairman of Advisory Board, Financial
Institutions Division
|
|
|
|
Robert B. Henske, Former Senior Vice President, Consumer Tax
Group
|
General
Compensation Philosophy and Objectives
Intuits compensation programs are designed to attract,
motivate and retain talented executives responsible for
Intuits success and are developed within a framework that
rewards both individual and company performance. Intuit
implements a pay-for-performance and performance management
approach to executive compensation by tying a large portion of
each executive officers compensation to performance-based
annual incentive bonuses and performance-based long-term equity
awards. In applying this approach, we seek to balance the
interests of our three key stakeholders employees,
customers and stockholders by:
|
|
|
|
|
Rewarding leaders for their individual impact on Intuits
progress against one-year operational and longer-term strategic
plans;
|
|
|
|
Reinforcing strategic and business plans to position Intuit for
growth; and
|
|
|
|
Enhancing stockholder value over time.
|
Based on the Compensation Committees evaluation of each of
the above criteria, compensation varies between Named Executive
Officers in any given year and as to each Named Executive
Officer on a year-over-year basis, based on the
individuals performance. The Compensation Committee
conducts its annual review process near the end of Intuits
fiscal year and determines each employees base salary for
the coming year, incentive bonus amount for the prior year and
the grant of any equity awards based on objective criteria,
including Intuits revenue and operating income growth, and
subjective criteria, including leadership and individual
performance.
Elements
of Compensation
Each major compensation component is structured to provide
significant differentiation based on individual performance and
to incentivize both short and long-term performance.
Intuits primary compensation components are:
|
|
|
|
|
Base salary,
|
|
|
|
Annual cash incentive awards; and
|
|
|
|
Long term incentives in the form of stock options and restricted
stock units (RSUs).
|
The Compensation Committee believes that a mix of both cash and
equity incentives is appropriate, as cash incentives reward
Named Executive Officers in the near term for achieving superior
performance and equity incentives motivate Named Executive
Officers to achieve superior performance in the longer term. In
determining the amount of the incentives awarded, the committee
considers the Named Executive Officers total compensation
for both the short and long-term to assess the retentive value
of the compensation package. The percentage of a Named Executive
Officers compensation opportunity that is
performance-based is determined primarily on his role at Intuit.
Named Executive Officers with direct ability to influence
overall company performance, such as Messrs. Bennett,
Patel, Smith, Stiefler and, formerly, Mr. Henske, have a
greater portion of their pay at risk through short and long-term
incentive programs than most other Intuit employees.
18
Competitive
Data
In fiscal 2007, as in prior years, the Compensation Committee
engaged Watson Wyatt to provide a comprehensive market study of
compensation paid to Mr. Bennett and Intuits senior
leadership team. The data for this study came from two sources:
(1) pertinent data from annual reports and proxy statements
from the peer group companies; and (2) the surveys
described below. The peer group and survey companies reviewed
and approved by the Compensation Committee are primarily
technology companies, some of which compete with Intuit for
business or for executive personnel. The Compensation
Committees intent was to choose peer group members or
surveys featuring companies that have one or more attributes
significantly similar to Intuit, including size, location,
general industry or products. None of the Named Executive
Officers participated in the selection of the comparable
companies. Watson Wyatt and representatives of Intuits
Human Resources/Compensation and Legal departments then reviewed
this data with the Compensation Committee. The following
companies make up the peer group for which Watson Wyatt provided
data:
|
|
|
|
|
Adobe
|
|
DST Systems
|
|
Network Appliance
|
ADP
|
|
Ebay
|
|
Paychex
|
BEA Systems
|
|
Electronic Arts
|
|
Sun Microsystems
|
BMC Software
|
|
First Data Corp
|
|
Symantec
|
Cadence
|
|
Fiserv
|
|
Synopsys
|
Checkfree
|
|
H&R Block
|
|
Verisign
|
Cisco Systems
|
|
McAfee
|
|
Yahoo
|
Data from the following surveys were also used by Watson Wyatt
to provide additional compensation information to the
Compensation Committee:
|
|
|
|
|
Radford/Aon Total Compensation
Survey: Software companies with revenue between
$1 billion and $3 billion
|
|
|
|
Watson Wyatt Data Services Top Management Compensation
Survey: High Technology and All Organizations
regressed to Intuits revenue size
|
|
|
|
Mercer Top Management Compensation
Survey: Regressed to Intuits revenue size
|
The data from the peer group companies was averaged with the
survey data above to create the benchmarks reviewed by the
Compensation Committee (Watson Wyatts Fiscal 2007
Study). This benchmarking data covered Intuits
financial performance for the short and long term as compared to
the companies in the peer group above.
The Compensation Committee used this competitive data as one of
several factors in its decisions regarding compensation.
Generally the data is used as a reference point in making
decisions as to whether the contributions of each executive are
properly reflected in his compensation. The Compensation
Committee also gives great weight to business performance,
including Intuits revenue and operating income growth, and
individual performance as described below.
The Compensation Committee reviewed Intuits executive
compensation programs and practices, and analyzed, for each
Intuit Named Executive Officer, all existing elements of
compensation (including base pay, cash bonus awards and
long-term compensation in the form of equity awards) during the
fourth quarter of fiscal 2007. The Compensation Committee
compared these compensation components separately, and in total,
to compensation at the peer group companies in an effort to set
each element of compensation at a level such that the aggregate
total compensation for each Named Executive Officer is at or
above the top quartile of peers surveyed, due to Intuits
performance and desire to retain and motivate our most talented
and experienced executives.
Specific
Elements of Compensation:
Base Pay
Intuit provides base salaries to all of its employees, including
the Named Executive Officers to provide them, throughout the
year, with the security of a fixed cash amount for services
rendered. Watson Wyatts Fiscal 2007 Study (which was based
on fiscal 2006 data) showed that Intuits base pay and cash
incentive compensation
19
opportunities for our Named Executive Officers, including its
Chief Executive Officer, were competitive with the market, with
Intuits total compensation opportunities in the top
quartile of the peer companies for analogous positions at peer
companies. The Compensation Committee considered that fact when
reviewing base salaries for fiscal 2008.
At the close of fiscal 2007, the Compensation Committee
determined that the base salaries of our Named Executive
Officers were appropriately competitive based on the competitive
data and therefore the Compensation Committee did not increase
base salaries for this group, except for Mr. Lintner.
Mr. Lintners salary was increased by 3.7% to $560,000
for fiscal 2008 to reward his outstanding performance during
fiscal 2007, including his implementation of strategic
initiatives which remain ongoing at Intuit and his leadership of
Intuits Strategy and Corporate Development Group. Among
other accomplishments, this group led the acquisition of Digital
Insight Corporation and led extensive customer segmentation work
for our Small Business Division.
Based on the importance of Mr. Stiefler to the continued
success of Digital Insight post-acquisition as a subsidiary of
Intuit, Mr. Stieflers base salary was set at $600,000
by the special compensation committee discussed above on
page 9. In setting Mr. Stieflers salary, the
special committee considered Mr. Stieflers public
company leadership experience, his importance to ensuring the
successful integration of Digital Insight with Intuit and the
salary levels of the leaders of Intuits other significant
business units. At the close of the 2007 fiscal year,
Mr. Stiefler was not given an increase in his base
compensation because of his recent hiring.
Cash
Incentive Bonus Awards
In keeping with its pay-for-performance culture, Intuit strives
to base a substantial portion of each employees total
compensation on annual performance. Most of Intuits
employees have an annual bonus target that is a stated
percentage of their base pay, which is based generally on the
employees level and position within Intuit.
Mr. Bennett has a bonus target of 160% of base salary;
Messrs. Henske, Patel, Smith and Stiefler each have a bonus
target of 75% of base salary; and Mr. Lintner has a bonus
target of 60% of base salary. The bonus targets of
Messrs. Henske, Patel and Smith were all set based on the
scope and significance of their roles as leaders of
Intuits largest business units or, in
Mr. Patels case, as the CFO. In fiscal 2007, these
leadership roles were the most significant at Intuit after the
role of the CEO. These bonus targets remained unchanged from
fiscal 2006 and reflect Intuits long-standing practice of
setting bonus targets based on executives level and
position. Mr. Stieflers target was set by the special
compensation committee, as noted above, at 75% based on both the
significance of his role and the negotiation of his employment
offer as part of the Digital Insight acquisition.
Mr. Lintners target was set at 60% due to his role as
a Senior Vice President who does not lead a major business unit.
The Named Executive Officer target amounts are used as a
guideline for the determination of bonus awards and are at or
near market median, but actual bonus payments vary significantly
from these targets, depending on company and individual
performance.
Annual bonuses are paid out under one of Intuits two
performance bonus plans: (1) the Senior Executive Incentive
Plan (SEIP) or (2) the Intuit Performance
Incentive Plan (IPI). Messrs. Bennett, Patel,
Henske, Lintner and Smith participated in the SEIP.
Mr. Stiefler participated in the IPI. Whether a bonus is
paid under the SEIP or IPI, the Compensation Committee believes
that it is important to exercise judgment and discretion, within
the boundaries of the plan guidelines, in determining bonus
payments. For this reason, annual bonuses are not paid out
according to a pre-determined mathematical formula, but rather
with careful analysis and balancing of many factors, including
the competitive environment, individual performance, overall
corporate performance, prior year compensation and the other
factors discussed below. No one factor was assigned specific
weighting.
The SEIP is a bonus plan administered by the Compensation
Committee for a select group of senior executives. As described
more fully in Proposal 4 on page 50, the SEIP is a
stockholder-approved plan designed to comply with the exception
under Section 162(m) of the Internal Revenue Code to the
non-deductibility of compensation over $1,000,000 per year for
specified individuals. Each year, the Compensation Committee
sets a performance target which must be achieved in order for
participants in the SEIP to receive a cash bonus award. During
the first quarter of fiscal 2007, the Compensation Committee
established a revenue target for the SEIP of
$2.342 billion, which had to be achieved in order for
participants to qualify for a bonus under the SEIP. At the close
of the fiscal year, Intuit had exceeded the revenue target.
Based on the achievement of this performance hurdle, the
Compensation Committee exercised its discretion to determine the
amount of bonus to be paid to participants, up to a maximum of
$5,000,000
20
per executive. Though no other performance was required for SEIP
participants to receive a bonus under this plan in fiscal 2007,
the Compensation Committee considered other factors when
determining the actual incentive bonuses awarded. The factors
evaluated by the Compensation Committee in establishing specific
SEIP bonus amounts with respect to each participant who is a
Named Executive Officer are described in more detail below.
The IPI is a broad-based discretionary cash bonus plan which, by
its terms, is approved and funded on an annual basis by the
Compensation Committee based on Intuits performance. The
plan has a maximum funding limit based on the Companys
operating income performance. Historically, IPI bonuses have
been awarded based generally upon Intuits funding of the
IPI plan and target bonus amounts, but there is no specific
performance hurdle which must be achieved in order for
individual bonus payments to be made. Individual payout amounts
depend on multiple performance criteria, including, but not
limited to, evaluations of personal job performance,
Intuits desire to retain specific employees and
Intuits performance measured against our annual business
and financial plans. As needed to reward and retain key
employees, an individuals actual bonus payments made under
the IPI may exceed individual target bonus amounts. The factors
evaluated by the Compensation Committee in establishing
Mr. Stieflers IPI bonus amount are described in more
detail below.
CEO
Cash Incentive Bonus Award
Mr. Bennett has served as President and CEO since January
2000. As described above, the Compensation Committee engaged
Watson Wyatt to provide a market analysis of
Mr. Bennetts compensation and to assist the
Compensation Committee in its review and assessment of
Mr. Bennetts performance and compensation for the
fiscal 2007 annual review cycle.
In determining the amount of Mr. Bennetts annual cash
incentive bonus award for fiscal 2007 under the SEIP, the
Compensation Committee considered many factors, including
achievement of fiscal year 2007 financial measures by Intuit and
its major business units as well as achievement of long-term
strategic and financial goals by Intuit and its major business
units.
Intuits performance against key financial measures for
fiscal 2007 is illustrated below:
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Annual Financial Measures for Fiscal 2007
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Performance
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Total Revenue
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$2.67 billion
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Annual Growth Rate
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17% (12% after excluding effects of M&A activities)
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Operating Income (Non-GAAP)*
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$764.8 million
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Annual Growth Rate
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17%
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Diluted Earnings Per Share (Non-GAAP)*
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$1.43
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Annual Growth Rate
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18%
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Intuits performance against key financial measures for the
past five years is illustrated below:
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Five-Year Financial Measures
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(Fiscal 2003 Fiscal 2007)
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Performance
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Revenue Growth
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15% Compounded Annual Growth Rate
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Operating Income Growth (Non-GAAP)*
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23% Compounded Annual Growth Rate
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Diluted Earnings Per Share Growth (Non-GAAP)*
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25% Compounded Annual Growth Rate
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* For a quantitative reconciliation of these non-GAAP
financial measures to the most directly comparable financial
measures prepared in accordance with GAAP, see Appendix A
to this Proxy Statement.
21
The Committee determined that Intuits performance in these
areas was outstanding and used this as a factor in determining
Mr. Bennetts annual bonus amount. In addition to the
short-term and long-term financial measures above, the
Compensation Committee also assessed Mr. Bennett on:
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Building and retaining a strong leadership team;
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Employee engagement, as measured through employee feedback and
third-party assessment;
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Customer satisfaction, as measured through the Net Promoter
methodology; and
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Long-term strategic and operational plans for Intuit and for
each of the major business units.
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This is how Mr. Bennett performed against these goals:
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Mr. Bennett cultivated outstanding leadership talent by
retaining and developing key leaders at Intuit, including the
mentoring of a future successor, Mr. Smith, and by hiring
new key leaders, including our new Chief Technology Officer and
Chief Information Officer;
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Intuit maintained
best-in-class
employee engagement scores, based on Intuit-wide surveys;
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Intuits ranking increased on Fortune magazines
Best Places to Work survey;
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Intuits Net Promoter scores for key products remained
competitive;
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Mr. Bennett, with his team, developed and executed on
long-term strategic plans that position Intuit for
growth; and
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Mr. Bennett, with his team, led the development and
execution of long-term operating plans for each major business
unit.
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The Compensation Committee considered Mr. Bennetts
performance on all the short-term and long-term financial and
individual criteria above and applied its judgment in
determining Mr. Bennetts specific incentive bonus
amount. Based on an in-depth review of these factors, the
Compensation Committee, after consultation with the Board of
Directors without Mr. Bennett present, awarded
Mr. Bennett a $3,250,000 incentive bonus for fiscal 2007.
The Compensation Committee determined that this bonus award was
consistent with Mr. Bennetts outstanding performance
based on short-term and long-term financial and individual
criteria established by the Compensation Committee earlier in
the fiscal year, as described above. This amount also reflected
a year-over-year increase from Mr. Bennetts fiscal
2006 bonus, which the Compensation Committee felt was merited in
light of Intuits continued growth. Mr. Bennetts
bonus exceeds that of the other Named Executive Officers because
of his responsibility as the leader of Intuit as a whole.
Named
Executive Officer Cash Incentive Bonus Awards
In addition to Intuits short-term and long-term financial
performance noted in the discussion above regarding
Mr. Bennetts bonus, the Compensation Committee
considered a number of other factors in determining the amount
of bonus to be paid each other Named Executive Officer.
Considerations included the following: (1) the executive
pay recommendations made by the Chief Executive Officer with
respect to each of the Named Executive Officers; (2) the
talent and organizational assessment of these individuals
provided by other members of management, including our Senior
Vice President of Human Resources; and (3) the scope of the
executives responsibilities, performance, and anticipated
impact or contribution to Intuits success and growth.
Based on these criteria, the Compensation Committee determined
that Mr. Smith delivered a year of successful financial
results for the Small Business Division, while leading efforts
to improve the divisions long term potential, as
demonstrated by improved new user growth in both Intuits
QuickBooks and Payroll businesses and the improved focus
resulting from the sale of a subset of our payroll customers to
ADP. In addition, he played a major leadership role within
Intuit, including executive sponsorship of the Digital Insight
acquisition. Based upon these successes, the Compensation
Committee awarded Mr. Smith an incentive bonus of $765,000.
The Compensation Committee determined that Mr. Patel played
a major leadership role throughout the year as our Chief
Financial Officer, and then, in order to continue to help Intuit
grow, Mr. Patel took on the leadership of the
22
Consumer Tax Group in June 2007, while continuing as acting CFO.
Based this assessment, the Compensation Committee awarded
Mr. Patel an incentive bonus of $683,000.
As noted above in the discussion of Mr. Lintners base
salary increase, the Compensation Committee determined that
Mr. Lintners strategic business guidance and business
development expertise were key to Intuits achievement of
its long-term objectives. The Compensation Committee reviewed
Mr. Lintners performance, as described above and
determined that he would receive an incentive bonus of $460,000.
As noted above, Mr. Stieflers bonus was paid under
the IPI plan, and, according to the terms of this plan, his
actual bonus payment was pro-rated based on his having joined
Intuit in February 2007, midway through our fiscal year.
Mr. Stiefler was determined by the Compensation Committee
to have performed well during his six months with Intuit based
on his leadership in integrating Digital Insight with
Intuits Financial Institutions Division. Based on this
performance, Mr. Stieflers incentive bonus was
$259,000.
Mr. Henkses employment terminated effective
August 10, 2007. Due to his prior role as the Senior Vice
President of our Consumer Tax Group, he was eligible to receive
a bonus as part of his Transition Terms Agreement with Intuit
described under Potential Payments Upon Termination of
Employment or Change in Control on page 35 below.
Based on the strong year and sales growth of the Consumer Tax
Group, under Mr. Henskes leadership, the Compensation
Committee awarded him an incentive bonus of $720,000.
Long-Term
Equity Incentives
Stock options and RSUs are a critical component of Intuits
efforts to attract and retain executive officers and other
employees. Generally, Intuit limits its option and RSU grants to
new-hires, executive promotions and annual performance awards.
Intuit grants stock options to provide a long-term incentive for
executives to remain with Intuit. Stock options provide value
only if Intuits stock price increases (which benefits all
stockholders), and only if the executive remains with Intuit
until his or her options vest. Intuits standard practice
is to grant options that vest over a three-year period, with the
first third of the options vesting on the one-year anniversary
of the grant date and the remaining options vesting evenly over
the following two years. RSUs also provide a long-term incentive
for executives to remain with Intuit, but because they do not
have an exercise price, RSUs provide value to recipients
regardless of Intuits stock price. Because of the
different structure of RSUs, Intuit awarded less than 25% of its
total equity grants as RSUs in fiscal 2007. For all Senior Vice
Presidents, including all of the Named Executive Officers other
than the CEO, since fiscal 2006, Intuit has granted RSUs that
vest after three years of service, but only if an initial
performance hurdle is satisfied by the end of the fiscal year of
the date of grant (the Performance-Based RSUs).
At the end of fiscal 2007, the Compensation Committee determined
the amount of stock options and Performance-Based RSUs to be
awarded to each Named Executive Officer, based on the
performance of Intuit and the individual and the share reserve
available. At that same time, the Compensation Committee also
determined whether the performance hurdles were achieved for the
Performance-Based RSUs awarded in 2006. The stock options
awarded were granted at the end of fiscal 2007. The RSUs awarded
were granted at the beginning of fiscal 2008, and their vesting
is contingent on the achievement of performance hurdles for
fiscal 2008.
The hurdles for the Performance-Based RSUs awarded in fiscal
2006 and granted in fiscal 2007 required that Intuits
revenue grow by 10% from fiscal 2006 to fiscal 2007 and that
Intuits non-GAAP operating income grow by 12% from fiscal
2006 to fiscal 2007. For fiscal 2007, Intuit exceeded both the
Performance-Based RSU revenue growth target and non-GAAP
operating income growth target. Based on Intuits results
for fiscal 2007, the Compensation Committee certified the
achievement of both hurdles, and therefore certain of the Named
Executive Officers will vest in their Performance-Based RSUs
awarded in fiscal 2006 on August 1, 2009, provided they
continue to provide service to Intuit through that date.
Based on fiscal 2007 performance, the Compensation Committee
awarded Messrs. Lintner, Patel and Smith options to
purchase 50,000, 75,000 and 100,000 shares, respectively.
The material terms of these options are described beginning on
page 29 under Grants of Plan-Based Awards in Fiscal
Year 2007. Also based on fiscal 2007 performance, the
Compensation Committee awarded Messrs. Lintner, Patel and
Smith 17,000, 25,000 and 34,000 Performance-Based RSUs,
respectively. As described above, these RSUs were granted in
fiscal 2008. The
23
size of the equity awards for Messrs. Patel and Smith were
set based on their roles as leaders of Intuits major
business units, in proportion to their cash compensation and
taking into account their fiscal 2006 equity awards. The size of
Mr. Lintners equity awards were determined based on
his role as a Senior Vice President who does not lead a major
business unit and in proportion to his relatively lower cash
compensation.
As part of Mr. Stieflers employment agreement, he was
awarded a 100,000 share option grant and 100,000 RSUs in
March 2007. In order to incentivize Mr. Stiefler to remain
engaged in the integration process in the initial period
following the acquisition of Digital Insight Corporation, these
options vest over twenty-four months. In an effort to encourage
Mr. Stiefler to remain highly motivated to continue the
success of Digital Insight Corporation once it became a part of
Intuit, Mr. Stieflers RSUs vest only upon the
achievement of certain revenue and operating income targets set
forth for the Intuit Financial Institutions Division. If these
targets are achieved by the thirty month anniversary of
Intuits Acquisition of Digital Insight Corporation,
Mr. Stiefler will become 100% vested in these RSUs. Because
Mr. Stiefler received these two awards in March 2007, the
Compensation Committee did not grant him any additional equity
awards during the annual performance review cycle.
CEO
Long-Term Incentive Awards
Throughout his tenure at Intuit, the Compensation Committee has
tried to create a total compensation package for
Mr. Bennett that is specifically tailored to provide him
with both short and long-term incentives.
Mr. Bennetts equity awards are his primary long-term
incentive and the terms of these awards differ from those of the
other Named Executive Officers, because of the Compensation
Committees desire to tie a larger portion of the
CEOs compensation more closely to Intuits
performance.
In fiscal 2005, Mr. Bennett was granted a 100,000-share RSU
with performance-based vesting criteria based on growth of
Intuits net revenue and non-GAAP operating income for
fiscal 2006. These criteria were satisfied in fiscal 2006 and
Mr. Bennett was scheduled to vest in the
100,000 shares on July 29, 2008. Because
Mr. Bennett entered into a Transition Agreement on
August 21, 2007, as described more fully under the
Potential Payments Upon Termination of Employment or
Change in Control on page 35 below, 80,555 of the
100,000 shares will vest upon Mr. Bennetts
ceasing to be CEO on January 1, 2008. Mr. Bennett will
vest in the remaining 19,445 shares on July 31, 2008,
provided he continues to provide service to Intuit through that
date.
In fiscal 2007, Mr. Bennett was granted 100,000 RSUs with
performance-based vesting criteria based on growth of
Intuits net revenue and non-GAAP operating income for
fiscal 2007 and fiscal 2008. Mr. Bennett vested in 50% of
the shares on July 31, 2007 because the performance hurdles
for those RSUs were reached, as discussed above. Because
Mr. Bennett entered into a Transition Agreement on
August 21, 2007, as described more fully under
Potential Payments Upon Termination of Employment or
Change in Control beginning on page 35 below, 20,833
of the remaining 50,000 RSUs will vest upon
Mr. Bennetts ceasing to be CEO on January 1,
2008. Mr. Bennett will vest in the remaining
29,167 shares on July 31, 2008 if certain financial
performance criteria for fiscal 2008 are reached (including
increased net revenue and increased non-GAAP operating income),
provided Mr. Bennett continues to provide service to Intuit
through that date.
Pursuant to the terms of the Transition Agreement Intuit entered
into with Mr. Bennett on August 21, 2007, as described
more fully beginning on page 35, Mr. Bennett was
granted an additional 50,000 stock options and 50,000 RSUs on
August 24, 2007 once the CEO transition plan was put into
place. These awards were granted to Mr. Bennett by the
Compensation Committee in order to retain and motivate
Mr. Bennett for the transition year and ensure his
engagement in succession planning and seamless execution of
Intuits fiscal 2008 strategy, as Mr. Smith assumes
the CEO role on January 1, 2008.
Intuits
Management Stock Purchase Program
On January 1, 2007, as a method of encouraging ownership of
Intuits stock by executives, Intuit launched a Management
Stock Purchase Program (MSPP) which replaced
Intuits prior matching award program. Under the MSPP,
employees with a title of director or above (including the Named
Executive Officers) have the opportunity to elect to defer up to
15% of their annual incentive bonus. This deferral is converted
into RSUs, based on the fair market value of Intuits stock
on the date such bonus is awarded. Intuit will grant the
executive an additional RSU for every RSU purchased through such
deferral, up to set maximums. These matching RSUs will vest as
to 100% of
24
the shares subject to the award three years after the grant
date, or on the recipients death or disability. This
three-year vesting period is intended to assist Intuit in
retaining key talent. The RSUs granted pursuant to the MSPP are
issued under the 2005 Equity Incentive Plan, in accordance with
the terms and conditions set forth therein.
Employee
Benefits
Each of our employees with a title of director or above
(including the Named Executive Officers) is eligible to
participate in a number of programs which make up Intuits
total compensation package, including health and welfare
benefits, executive relocation benefits, our 401(k) Plan with a
company-sponsored match component, our Employee Stock Purchase
Plan, our Non-Qualified Deferred Compensation Plan and our MSPP.
The Non-Qualified Deferred Compensation Plan and the MSPP
provide an opportunity for deferral of compensation, in
compliance with Section 409A of the Internal Revenue Code.
As described in more detail above, the MSPP also encourages
eligible employees to own Intuit stock. When determining
executive compensation, the Compensation Committee considers all
the components noted above and may use any and all of these
programs to provide the appropriate level of total compensation
to executives. Intuits only material perquisites for Named
Executive Officers in fiscal 2007 relate to relocation benefits.
Role of
Executive Officers, the Board and Consultants in Compensation
Determinations
The Compensation Committee was supported by Intuits Human
Resources Department. In order to provide comprehensive support
to the Compensation Committee, a representative of the Human
Resources Department, usually the Senior Vice President of Human
Resources or the Vice President in charge of compensation
attended all regular meetings of the Compensation Committee. In
addition, a representative of Intuits Legal and Compliance
Organization also attended all regular meetings of the
Compensation Committee, in order to provide guidance regarding
the legal implications for Intuit of certain compensation
decisions. Mr. Campbell, the Chairman of the Board and an
Intuit employee, also regularly participated in Compensation
Committee meetings, providing management input on organizational
development and succession planning. Both Mr. Bennett, our
CEO, and Mr. Patel, our CFO, have provided the Compensation
Committee with guidance and perspective from time to time. The
CFO provided analysis regarding Intuits achievement of
financial performance hurdles and aided the Compensation
Committee in determining appropriate revenue and operating
income targets for the fiscal year for the SEIP and the
Performance-Based RSUs. Mr. Bennett provided
recommendations to the Compensation Committee regarding the cash
and equity compensation of his executive staff and met
informally with members of the Compensation Committee and the
chairman to discuss succession planning and organizational
development. In addition, Mr. Bennett provided a written
self-review to the Compensation Committee in order to aid their
evaluation of his performance for the 2007 fiscal year.
The Compensation Committee determines the compensation for
Mr. Bennett after conferring with the Board, without
Mr. Bennett present. In determining compensation for the
Named Executive Officers other than the CEO, the Compensation
Committee considered Mr. Bennetts recommendations.
The Compensation Committee is, however, solely responsible for
making the final decisions on compensation for the Named
Executive Officers including the CEO.
In making compensation decisions, the Compensation Committee
also has the authority to engage the services of outside
advisers, experts and others to assist the Compensation
Committee, and, as noted above, has engaged Watson Wyatt. For
this purpose Watson Wyatt attended some of the meetings of the
Compensation Committee, responding to committee members
inquiries and refining their analysis based on these questions,
but its day-to-day contact was Intuits VP, Compensation.
The Compensation Committee also periodically reviews
Intuits key management from the perspectives of leadership
development, organizational development and succession planning
through Intuits High Performance Organization Review. As
part of this process, the Compensation Committee also meets with
key senior executives. The systemic assessment of Intuits
organization and talent planning, helped the Compensation
Committee to evaluate Intuits effort at hiring, developing
and retaining executives, with the goal of creating and growing
Intuits bench strength at the most senior
executive levels. This review resulted in the identification and
appointment of Mr. Smith as Mr. Bennetts
successor and certain other executive appointments throughout
fiscal 2007.
25
Accounting
and Tax Implications of Our Compensation Policies
In designing our compensation programs, the Compensation
Committee considers the financial accounting and tax
consequences to Intuit as well as the tax consequences to our
employees. We account for equity compensation paid to our
employees under SFAS 123(R), which requires us to estimate
and record and expense over the service period of the award. The
SFAS 123(R) cost of outstanding equity awards is considered
by management as part of our equity grant recommendations to the
Compensation Committee. Beginning in fiscal 2006, we generally
reduced our use of stock options and increased our use of
restricted stock awards in order to reduce our SFAS 123(R)
expense.
Under Section 162(m) of the Internal Revenue Code,
compensation in excess of $1,000,000 per year to those
executives whose compensation is detailed in the Summary
Compensation Table (see page 27) is not tax deductible to
Intuit unless certain requirements are met. The $1,000,000 limit
does not apply to compensation that is considered
performance based under applicable tax rules.
Although not required by law to do so, Intuit has taken steps so
that most executive compensation is deductible, including the
use of performance-based equity incentives and the stockholder
approved Senior Executive Incentive Plan. Our Performance-Based
RSUs are intended to qualify as performance-based,
so that compensation attributable to those awards is fully tax
deductible. Although we currently provide compensation to
executives in forms that do not meet the requirements for
performance-based compensation, such as base salary,
annual incentive pay and restricted stock, Mr, Bennett is our
only executive with non-performance based compensation in excess
of the Section 162(m) tax deduction limit. Certain income
received by the CEO in fiscal 2006 when he vested in part of two
restricted stock grants that he received when he was hired in
January 2000 were not deductible by Intuit under
Section 162(m).
Intuit does not expect that the deductibility of compensation to
officers other than the CEO will be affected by the limitations
of Section 162(m) in fiscal 2007. Intuit expects that the
only significant amount of non-deductible compensation paid to
the CEO in fiscal 2007 will be the $100,000 of his base salary
in excess of $1,000,000. However, since corporate objectives may
not always be consistent with the requirements for full
deductibility, it is conceivable that Intuit may enter into
compensation arrangements under which payments are not
deductible under Section 162(m).
We also consider the tax impact to employees in designing our
pay programs, particularly our equity pay programs. For example,
while employees generally control the timing of taxation with
respect to stock options, the timing of taxation of restricted
stock is generally not within the employees control. As a
result, as part of our restricted stock grant program, we
provide a net issue opportunity to employees to
assist them with the tax withholding requirements that apply to
restricted stock.
Stock
Ownership
Intuit has a mandatory share ownership program that applies to
senior vice presidents, the CEO and members of the Board. This
program requires senior vice presidents to hold a minimum of
10,000 to 15,000 shares each, depending on their base
salary levels, requires the CEO to hold a minimum of
100,000 shares, and requires Board members to hold a
minimum of 10,000 shares. Individuals who are subject to
these requirements must comply within five years after the date
the individual is appointed to a position which is subject to
the share ownership program. In the event an executive is
promoted within this five year period, the individuals
share ownership requirement increases.
Intuits
Equity Granting Policy
Stock options and restricted stock units may be granted by
either the Compensation Committee or, pursuant to the terms of
its Charter, by its delegates, the CEO and the Senior Vice
President of Human Resources. These individuals, acting
independently, each have authority to grant stock options and
RSUs to employees below the level of Vice President, up to a
certain number of shares per individual specified by the
Compensation Committee. The CEO and the Senior Vice President of
Human Resources, acting jointly, may grant such awards to
employees at the level of Vice President, up to a certain number
of shares per individual specified by the Compensation
Committee, provided such employees do not report to the CEO or
to a committee of the Board. Equity grants made to Senior
26
Vice Presidents or above, to individuals who report to the CEO
or to a committee of the Board, or to individuals who receive
amounts above the stated share limit per individual must be
approved by the Compensation Committee.
Timing of Grants. Equity awards are typically
granted on regularly scheduled grant dates on the seventh
business day of each month. The only exceptions to this are
specifically approved by the Compensation Committee. The CEO and
Senior Vice President of Human Resources do not have discretion
to set other grant dates for awards made pursuant to their
delegated authority. Our annual performance-related awards are
made on a prospective date determined by the Compensation
Committee well in advance of the close of the fiscal year based
on Intuits annual performance review cycle, the
Compensation Committees meeting schedule, the existing
share reserve under our 2005 Equity Incentive Plan and the
equity award utilization during each fiscal year.
Option Exercise Price. The exercise price of a
newly granted option (i.e., not an option assumed or substituted
in connection with a corporate transaction) is the closing price
on the NASDAQ stock market on the date of grant.
Summary
Compensation Table
The following table shows compensation earned during fiscal 2007
by our CEO, our CFO, our three other most highly compensated
executive officers for fiscal 2007 and one former executive
officer. We call these individuals our Named Executive
Officers. For information about employment contracts,
termination of employment and change-of-control arrangements
between Intuit and the Named Executive Officers, see
Potential Payments Upon Termination of Employment or
Change in Control on page 35.
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Non-Equity
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Stock
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Option
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Incentive Plan
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All Other
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Name and
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Salary
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Bonus
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Awards
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Awards
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Compensation
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Compensation
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Total
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Principal Position
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($)
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($)
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($)(1)
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($)(1)
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($)(2)
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($)
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|
|
($)
|
|
|
Stephen M. Bennett
|
|
|
1,100,000
|
|
|
|
|
|
|
|
6,689,217
|
|
|
|
1,195,807
|
|
|
|
3,250,000
|
|
|
|
490,995
|
(3)
|
|
|
12,726,019
|
|
President and Chief
Executive Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kiran M. Patel
|
|
|
699,038
|
|
|
|
|
|
|
|
139,220
|
|
|
|
1,350,831
|
|
|
|
683,000
|
(4)
|
|
|
428,861
|
(5)
|
|
|
3,300,950
|
|
Senior Vice
President, Consumer
Tax Group and Chief
Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert B. Henske
|
|
|
598,627
|
|
|
|
|
|
|
|
344,507
|
|
|
|
546,850
|
|
|
|
720,000
|
|
|
|
125,000
|
(6)
|
|
|
2,334,984
|
|
Former Senior Vice
President, Consumer
Tax Group
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander M. Lintner
|
|
|
538,461
|
|
|
|
170,000
|
(7)
|
|
|
181,149
|
|
|
|
419,082
|
|
|
|
460,000
|
|
|
|
14,156
|
(8)
|
|
|
1,782,848
|
|
Senior Vice
President, Strategy & Corporate
Development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad D. Smith
|
|
|
596,154
|
|
|
|
|
|
|
|
342,605
|
|
|
|
794,825
|
|
|
|
765,000
|
|
|
|
84,240
|
(9)
|
|
|
2,582,824
|
|
Senior Vice
President, Small
Business Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey E. Stiefler
|
|
|
272,308
|
|
|
|
259,000
|
|
|
|
461,258
|
|
|
|
156,065
|
|
|
|
|
|
|
|
1,789,112
|
(10)
|
|
|
2,937,743
|
|
Chairman of
Advisory Board,
Financial Institutions
Division
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The expense for the stock awards and option awards above was
computed in accordance with SFAS 123R (excluding risk of
forfeiture). See Intuits annual report on
Form 10-K
for the fiscal year ended July 31, 2007 |
27
|
|
|
|
|
for a complete description of the SFAS 123R valuation. The
actual number of stock awards or stock options granted in fiscal
2007 is shown in the Grants of Plan Based Awards
table included in this filing. |
|
(2) |
|
All amounts represent the payments made for fiscal 2007
performance under Intuits Senior Executive Incentive Plan
(SEIP) which were paid in August 2007. The SEIP is
described in more detail in Compensation Discussion and Analysis
beginning on page 17 and in
Proposal No. 4 Adoption of the
Intuit Inc. Senior Executive Incentive Plan beginning on
page 50. |
|
(3) |
|
Includes an annual contribution by Intuit to
Mr. Bennetts non-qualified deferred compensation plan
account of $175,000; matching contributions under Intuits
401(k) plan of $10,000; premiums for Intuits Executive
Long-Term Disability Plan; $5,614 of relocation benefits (of
which $2,383 was tax
gross-up);
and $296,187 of imputed interest on Mr. Bennetts
$4,375,000 mortgage loan from Intuit that would have been
payable in 2007 had the loan not been interest free. See
Potential Payments Upon Termination of Employment or
Change in Control beginning on page 35 for more
information on this loan. |
|
(4) |
|
The amount includes a deferral of the amounts set forth in the
table below at the recipients election under Intuits
Management Stock Purchase Program (MSPP). Under the
terms of the MSPP, a participant may elect to use a stated
portion of their annual bonus (or SEIP award) to purchase
restricted stock units (RSUs) under Intuits
2005 Equity Incentive Plan. Intuit then matches these purchased
RSUs with another grant of RSUs which vest three years from the
date of grant. The MSPP is described in greater detail on
page 24. |
MSPP
Deferrals:
|
|
|
|
|
|
|
MSPP
|
Name
|
|
Contribution ($)
|
|
Kiran M. Patel
|
|
|
53,226
|
|
Alexander M. Lintner
|
|
|
55,200
|
|
Brad D. Smith
|
|
|
76,500
|
|
Jeffrey E. Stiefler
|
|
|
38,850
|
|
|
|
|
(5) |
|
Includes an annual contribution by Intuit to
Mr. Patels non-qualified deferred compensation plan
account of $350,000 in 2007; matching contributions under
Intuits 401(k) plan of $10,947; premiums for Intuits
Executive Long-Term Disability Plan; and $62,928 in relocation
benefits (of which $1,770 was tax
gross-up). |
|
(6) |
|
Includes matching contributions under Intuits 401(k) plan
of $11,169; premiums for Intuits Executive Long-Term
Disability Plan; and $110,599 in the aggregate for monthly
bonuses (of which $50,599 was tax
gross-up)
related to living expenses pursuant to Mr. Henskes
employment agreement. Mr. Henske is no longer employed by
Intuit. |
|
(7) |
|
This amount reflects the payment of a one-year anniversary bonus
awarded to Mr. Lintner pursuant to the terms of his
employment agreement. |
|
(8) |
|
Includes matching contributions under Intuits 401(k) plan
of $10,996 ; and premiums for Intuits Executive Long-Term
Disability Plan. |
|
(9) |
|
Includes matching contributions under Intuits 401(k) plan
of $10,000; premiums for Intuits Executive Long-Term
Disability Plan; and $71,421 in the aggregate for a mortgage
subsidy paid pursuant to the terms of Mr. Smiths
employment agreement. |
|
(10) |
|
Includes matching contributions under Intuits 401(k) plan
of $6,981; premiums for Intuits Executive Long-Term
Disability Plan; and $1,777,661 paid upon the close of the
acquisition of Digital Insight Corporation in February 2007
pursuant to Mr. Stieflers employment agreement with
Intuit. |
28
Grants
of Plan-Based Awards in Fiscal Year 2007
The following table provides information about performance-based
equity awards granted under our 2005 Equity Incentive Plan to
the Named Executive Officers during fiscal 2007 and cash awards
for which the Named Executive Officers were eligible in fiscal
2007 under our cash incentive plans.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
|
|
|
|
|
|
|
Under Non-Equity
|
|
|
Under Equity
|
|
|
Grant Date
|
|
|
|
|
|
|
Incentive Plan Awards(1)
|
|
|
Incentive Plan Awards
|
|
|
Fair Value of
|
|
|
|
Grant
|
|
|
Target
|
|
|
Maximum
|
|
|
Target
|
|
|
Maximum
|
|
|
Stock
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
Awards ($)(2)
|
|
|
Stephen M. Bennett
|
|
|
08/25/06
|
|
|
|
1,760,000
|
|
|
|
5,000,000
|
|
|
|
100,000
|
(3)
|
|
|
100,000
|
|
|
|
3,082,000
|
|
Kiran M. Patel
|
|
|
08/25/06
|
|
|
|
525,000
|
|
|
|
5,000,000
|
|
|
|
12,500
|
(4)
|
|
|
12,500
|
|
|
|
385,250
|
|
Robert B. Henske
|
|
|
08/25/06
|
|
|
|
450,000
|
|
|
|
5,000,000
|
|
|
|
34,000
|
(5)
|
|
|
34,000
|
|
|
|
1,047,880
|
|
Alexander M. Lintner
|
|
|
08/25/06
|
|
|
|
324,000
|
|
|
|
5,000,000
|
|
|
|
17,000
|
(4)
|
|
|
17,000
|
|
|
|
523,940
|
|
Brad D. Smith
|
|
|
08/25/06
|
|
|
|
450,000
|
|
|
|
5,000,000
|
|
|
|
34,000
|
(4)
|
|
|
34,000
|
|
|
|
1,047,880
|
|
Jeffrey E. Stiefler
|
|
|
03/09/07
|
|
|
|
215,753
|
|
|
|
N/A
|
|
|
|
100,000
|
(6)
|
|
|
100,000
|
|
|
|
2,822,000
|
|
|
|
|
(1) |
|
All of the Named Officers, other than Mr. Stiefler, were
eligible for an incentive bonus under Intuits Senior
Executive Incentive Plan (SEIP), a stockholder
approved plan designed to comply with the exception under
Section 162(m) of the Internal Revenue Code to the
non-deductiblity of compensation over $1,000,000 per year for
specified individuals. Mr. Stiefler was eligible for an
incentive bonus under the Intuit Performance Incentive Plan
(IPI). The SEIP and the IPI are described more fully
in the Compensation Discussion and Analysis
beginning on page 17. The SEIP is also described in
Proposal No. 4 Adoption of the
Intuit Inc. Senior Executive Incentive Plan beginning on
page 50. |
|
(2) |
|
Calculated in accordance with SFAS 123R. |
|
(3) |
|
Based upon the achievement of specified performance targets in
fiscal 2007, this restricted stock unit award vested as to 50%
of the shares on July 31, 2007. If additional specified
performance targets are achieved in fiscal 2008, this award will
vest as to the remaining 50% of the shares on July 31,
2008, contingent on the recipients continued service
through July 31, 2008. |
|
(4) |
|
Based upon the achievement of specified performance targets in
fiscal 2007, contingent on the recipients continued
service through August 1, 2009, this restricted stock unit
award will vest as to 100% of the shares on August 1, 2009. |
|
(5) |
|
The unvested portion of this restricted stock unit award expired
upon the termination of Mr. Henskes employment in
August 2007. |
|
(6) |
|
If specified performance targets are achieved, this award will
vest as to 100% of the shares on August 6, 2009, contingent
on the recipients continued service through August 1,
2009. |
The following table provides information about stock options
granted under our 2005 Equity Incentive Plan to the Named
Executive Officers during fiscal 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Other
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Exercise or
|
|
|
Grant Date
|
|
|
|
|
|
|
Securities
|
|
|
Base Price of
|
|
|
Fair Value of
|
|
|
|
Grant
|
|
|
Underlying
|
|
|
Option Awards
|
|
|
Option
|
|
Name
|
|
Date
|
|
|
Options (#)
|
|
|
($/share)
|
|
|
Awards ($)(1)
|
|
|
Stephen M. Bennett
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kiran M. Patel
|
|
|
07/25/07
|
|
|
|
75,000
|
(2)
|
|
|
30.07
|
|
|
|
639,525
|
|
Robert B. Henske
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander M. Lintner
|
|
|
07/25/07
|
|
|
|
50,000
|
(2)
|
|
|
30.07
|
|
|
|
426,350
|
|
Brad D. Smith
|
|
|
07/25/07
|
|
|
|
100,000
|
(2)
|
|
|
30.07
|
|
|
|
852,700
|
|
Jeffrey E. Stiefler
|
|
|
03/09/07
|
|
|
|
100,000
|
(3)
|
|
|
28.22
|
|
|
|
758,650
|
|
|
|
|
(1) |
|
Calculated in accordance with SFAS 123R. |
29
|
|
|
(2) |
|
This option vests as to
331/3%
of the underlying shares on July 25, 2008, then as to
2.778% of the shares each month thereafter. |
|
(3) |
|
This option vests as to 100% of the underlying shares on
February 6, 2009. |
Outstanding
Equity Awards at Fiscal 2007 Year-End
The following table provides information with respect to
outstanding stock options held by the Named Executive Officers
as of July 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Option Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Expiration
|
|
Name
|
|
Exercisable (#)
|
|
|
Unexercisable (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Stephen M. Bennett
|
|
|
1,600,000
|
|
|
|
|
|
|
|
33.78
|
|
|
|
01/24/10
|
|
|
|
|
200,000
|
|
|
|
|
|
|
|
17.96
|
|
|
|
04/28/10
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
17.03
|
|
|
|
02/09/11
|
|
|
|
|
450,000
|
|
|
|
|
|
|
|
21.99
|
|
|
|
07/31/09
|
|
|
|
|
450,000
|
|
|
|
|
|
|
|
22.16
|
|
|
|
09/25/09
|
|
|
|
|
450,000
|
|
|
|
|
|
|
|
18.72
|
|
|
|
07/31/11
|
|
|
|
|
100,000
|
|
|
|
100,000
|
(1)
|
|
|
24.00
|
|
|
|
07/28/12
|
|
|
|
|
50,000
|
|
|
|
50,000
|
(2)
|
|
|
31.29
|
|
|
|
07/25/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,300,000
|
|
|
|
150,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kiran M. Patel
|
|
|
519,428
|
|
|
|
330,572
|
(3)
|
|
|
21.71
|
|
|
|
10/11/12
|
|
|
|
|
16,665
|
|
|
|
33,335
|
(4)
|
|
|
31.29
|
|
|
|
07/25/13
|
|
|
|
|
|
|
|
|
75,000
|
(5)
|
|
|
30.07
|
|
|
|
07/24/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
536,093
|
|
|
|
438,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert B. Henske
|
|
|
800,000
|
|
|
|
|
|
|
|
23.54
|
|
|
|
01/03/10
|
|
|
|
|
90,000
|
|
|
|
|
|
|
|
24.13
|
|
|
|
01/27/11
|
|
|
|
|
2,778
|
|
|
|
|
|
|
|
18.72
|
|
|
|
07/30/11
|
|
|
|
|
79,998
|
|
|
|
40,002
|
(6)
|
|
|
24.00
|
|
|
|
07/28/12
|
|
|
|
|
33,330
|
|
|
|
66,670
|
(4)
|
|
|
31.29
|
|
|
|
07/25/13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,006,106
|
|
|
|
106,672
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander M. Lintner
|
|
|
11,574
|
|
|
|
72,226
|
(7)
|
|
|
22.81
|
|
|
|
09/12/12
|
|
|
|
|
16,665
|
|
|
|
33,335
|
(4)
|
|
|
31.29
|
|
|
|
07/25/13
|
|
|
|
|
|
|
|
|
50,000
|
(5)
|
|
|
30.07
|
|
|
|
07/24/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
28,239
|
|
|
|
155,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Option Awards
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Expiration
|
|
Name
|
|
Exercisable (#)
|
|
|
Unexercisable (#)
|
|
|
Price ($)
|
|
|
Date
|
|
|
Brad D. Smith
|
|
|
80,000
|
|
|
|
|
|
|
|
21.12
|
|
|
|
02/10/10
|
|
|
|
|
20,000
|
|
|
|
|
|
|
|
21.43
|
|
|
|
08/01/10
|
|
|
|
|
50,000
|
|
|
|
|
|
|
|
21.07
|
|
|
|
03/22/11
|
|
|
|
|
70,000
|
|
|
|
|
|
|
|
18.72
|
|
|
|
07/30/11
|
|
|
|
|
144,441
|
|
|
|
55,559
|
(8)
|
|
|
22.33
|
|
|
|
06/09/12
|
|
|
|
|
79,998
|
|
|
|
40,002
|
(9)
|
|
|
24.00
|
|
|
|
07/28/12
|
|
|
|
|
33,330
|
|
|
|
66,670
|
(4)
|
|
|
31.29
|
|
|
|
07/25/13
|
|
|
|
|
|
|
|
|
100,000
|
(5)
|
|
|
30.07
|
|
|
|
07/24/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
477,769
|
|
|
|
262,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey E. Stiefler
|
|
|
|
|
|
|
100,000
|
(10)
|
|
|
28.22
|
|
|
|
03/08/14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This option vested as to 50% of the underlying shares on
July 29, 2007; the remaining 50% of the shares are
scheduled to vest on July 29, 2008. |
|
(2) |
|
This option vested as to 50% of the underlying shares on
July 26, 2007; the remaining 50% of the shares are
scheduled to vest on July 26, 2008. |
|
(3) |
|
This option vested as to
331/3%
of the underlying shares on September 12, 2006, and vests
as to 2.778% of the shares each month thereafter. |
|
(4) |
|
This option vested as to
331/3%
of the underlying shares on July 26, 2007, and vests as to
2.778% of the shares each month thereafter. |
|
(5) |
|
This option vests as to
331/3%
of the underlying shares on July 25, 2008, and vests as to
2.778% of the shares each month thereafter. |
|
(6) |
|
This option vested as to
331/3%
of the underlying shares on July 29, 2006, then as to
2.778% of the shares each month thereafter. However, pursuant to
the terms of Mr. Henskes termination of employment on
August 10, 2007, the 40,002 unvested shares underlying this
option expired. For more information on Mr. Henskes
termination, see Potential Payments Upon Termination of
Employment or Change in Control beginning on page 35. |
|
(7) |
|
This option vested as to
331/3%
of the underlying shares on August 8, 2006, and vests as to
2.778% of the shares each month thereafter. |
|
(8) |
|
This option vested as to
331/3%
of the underlying shares on May 6, 2006, and vests as to
2.778% of the shares each month thereafter. |
|
(9) |
|
This option vested as to
331/3%
of the underlying shares on July 29, 2006, and vests as to
2.778% of the shares each month thereafter. |
|
(10) |
|
This option vests as to 100% of the underlying shares on
February 6, 2009. |
31
The following table provides information with respect to
outstanding restricted shares and restricted stock units held by
the Named Executive Officers as of July 31, 2007. The
market value of the awards is determined by multiplying the
number of unvested shares or units by $28.64, the closing price
of Intuits common stock on NASDAQ on July 31, 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding Stock Awards
|
|
|
|
|
|
|
|
|
|
Performance-Based Vesting Awards
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Equity Incentive
|
|
|
|
Time-Based Vesting Awards
|
|
|
Plan Awards:
|
|
|
Plan Awards:
|
|
|
|
|
|
|
Market
|
|
|
Number of
|
|
|
Market or
|
|
|
|
Number of
|
|
|
Value of
|
|
|
Unearned
|
|
|
Payout Value of
|
|
|
|
Shares or
|
|
|
Shares or
|
|
|
Shares, Units
|
|
|
Unearned Shares,
|
|
|
|
Units of
|
|
|
Units of
|
|
|
or Other
|
|
|
Units or Other
|
|
|
|
Stock That
|
|
|
Stock That
|
|
|
Rights That
|
|
|
Rights That
|
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
|
Have Not
|
|
Name
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Vested ($)
|
|
|
Stephen M. Bennett
|
|
|
45,000
|
(1)
|
|
|
1,288,800
|
|
|
|
|
|
|
|
|
|
|
|
|
170,000
|
(2)
|
|
|
4,868,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(3)
|
|
|
2,864,000
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000
|
(4)
|
|
|
1,432,000
|
|
Kiran M. Patel
|
|
|
3,000
|
(5)
|
|
|
85,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,500
|
(6)
|
|
|
358,000
|
|
Robert B. Henske
|
|
|
|
|
|
|
|
|
|
|
34,000
|
(7)
|
|
|
973,760
|
|
Alexander M. Lintner
|
|
|
1,700
|
(8)
|
|
|
48,688
|
|
|
|
|
|
|
|
|
|
|
|
|
298
|
(9)
|
|
|
8,535
|
|
|
|
|
|
|
|
|
|
|
|
|
256
|
(10)
|
|
|
7,332
|
|
|
|
|
|
|
|
|
|
|
|
|
254
|
(11)
|
|
|
7,275
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,000
|
(6)
|
|
|
486,880
|
|
Brad D. Smith
|
|
|
218
|
(12)
|
|
|
6,244
|
|
|
|
|
|
|
|
|
|
|
|
|
230
|
(13)
|
|
|
6,587
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
(14)
|
|
|
7,160
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
(15)
|
|
|
7,160
|
|
|
|
|
|
|
|
|
|
|
|
|
272
|
(16)
|
|
|
7,790
|
|
|
|
|
|
|
|
|
|
|
|
|
82
|
(17)
|
|
|
2,348
|
|
|
|
|
|
|
|
|
|
|
|
|
256
|
(18)
|
|
|
7,332
|
|
|
|
|
|
|
|
|
|
|
|
|
214
|
(19)
|
|
|
6,129
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34,000
|
(6)
|
|
|
973,760
|
|
Jeffrey E. Stiefler
|
|
|
|
|
|
|
|
|
|
|
100,000
|
(20)
|
|
|
2,864,000
|
|
|
|
|
(1) |
|
Restricted stock award vests with respect to 15,000 of the
underlying shares on the first date upon which Mr. Bennett
is able to trade following January 24 of each year through 2010.
However, pursuant to the terms of this award and
Mr. Bennetts Transition Agreement, the vesting of the
45,000 unvested shares underlying this award will accelerate and
those shares will vest on January 1, 2008. For more
information on Mr. Bennetts transition, see
Potential Payments Upon Termination of Employment or
Change in Control beginning on page 35. |
|
(2) |
|
The original July 30, 2003 award of 850,000 restricted
stock units vested as to 510,000 units on July 31,
2006 and 170,000 additional units on July 31, 2007, with
the remaining 170,000 units scheduled to vest on
July 31, 2008. However, pursuant to the terms of this award
and Mr. Bennetts Transition Agreement, the vesting of
70,833 of the unvested units underlying this award will
accelerate and those units will vest on January 1, 2008 and
the remaining 99,167 units will vest on July 31, 2008.
For more information on Mr. Bennetts transition, see
Potential Payments Upon Termination of Employment or
Change in Control beginning on page 35. Pursuant to
the terms of this restricted stock unit agreement, the vesting
of this award occurs separate and apart from the issuance of the
underlying shares to Mr. Bennett. Therefore,
Mr. Bennett will receive his first |
32
|
|
|
|
|
issuance of 340,000 shares underlying this award on
January 2, 2008 and the remaining underlying shares will be
issued to Mr. Bennett on August 1, 2008. |
|
(3) |
|
Due to achievement of specified performance targets, this
restricted stock unit award was scheduled to vest as to 100% of
the shares on July 29, 2008. However, pursuant to the terms
of this award and Mr. Bennetts Transition Agreement,
the vesting of 80,555 unvested shares underlying this award will
accelerate and those shares will vest and be issued on
January 1, 2008 and the remaining unvested shares will vest
and be issued on July 29, 2008. For more information on
Mr. Bennetts transition, see Potential Payments
Upon Termination of Employment or Change in Control
beginning on page 35. |
|
(4) |
|
Due to the achievement of specified performance targets, 50% of
the 100,000 shares underlying this restricted stock unit
award vested on July 31, 2007, and the remaining 50% of
this award was scheduled to vest on July 31, 2008. However,
pursuant to the terms of this award and Mr. Bennetts
Transition Agreement, the vesting of 20,833 unvested shares
underlying this award will accelerate and those shares will vest
and be issued on January 1, 2008 and the remaining unvested
units will vest on July 31, 2008. For more information on
Mr. Bennetts transition, see Potential Payments
Upon Termination of Employment or Change in Control
beginning on page 35. |
|
(5) |
|
These restricted stock units automatically vest four years after
the grant date on September 22, 2009. |
|
(6) |
|
If specified performance targets are achieved, this restricted
stock unit award will vest as to 100% of the shares on
August 1, 2009. |
|
(7) |
|
If specified performance targets were achieved, this restricted
stock unit award was scheduled to vest as to 100% of the shares
on August 1, 2009. However, pursuant to the terms of this
award and Mr. Henskes termination of employment on
August 10, 2007, 10,388 units vested on
August 10, 2007 and the remaining 23,612 unvested units
terminated. For more information on Mr. Henskes
termination, see Potential Payments Upon Termination of
Employment or Change in Control beginning on page 35. |
|
(8) |
|
These restricted stock units automatically vest four years after
the grant date on August 30, 2009. |
|
(9) |
|
These restricted stock units automatically vest four years after
the grant date on December 15, 2009. |
|
(10) |
|
These restricted stock units automatically vest four years after
the grant date on March 15, 2010. |
|
(11) |
|
These restricted stock units automatically vest four years after
the grant date on June 15, 2010. |
|
(12) |
|
These restricted stock units automatically vest four years after
the grant date on June 15, 2008. |
|
(13) |
|
These restricted stock units automatically vest four years after
the grant date on September 15, 2008. |
|
(14) |
|
These restricted stock units automatically vest four years after
the grant date on December 15, 2008. |
|
(15) |
|
These restricted stock units automatically vest four years after
the grant date on March 15, 2009. |
|
(16) |
|
These restricted stock units automatically vest four years after
the grant date on June 15, 2009. |
|
(17) |
|
These restricted stock units automatically vest four years after
the grant date on September 15, 2009. |
|
(18) |
|
These restricted stock units automatically vest four years after
the grant date on March 15, 2010. |
|
(19) |
|
These restricted stock units automatically vest four years after
the grant date on June 15, 2010. |
|
(20) |
|
If specified performance targets are achieved, the restricted
stock units will vest as to 100% of the shares on August 6,
2009, contingent on the recipients continued service
through August 1, 2009. |
33
Option
Exercises and Stock Vested in Fiscal Year 2007
The following table shows information about stock option
exercises and vesting of RSUs and restricted shares for each of
the Named Executive Officers during fiscal 2007, including the
value realized upon exercise or vesting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of
|
|
|
Value
|
|
|
Number of
|
|
|
Value
|
|
|
|
Shares Acquired
|
|
|
Realized on
|
|
|
Shares Acquired
|
|
|
Realized on
|
|
|
|
on Exercise (#)
|
|
|
Exercise ($)
|
|
|
on Vesting (#)
|
|
|
Vesting ($)
|
|
|
Stephen M. Bennett
|
|
|
|
|
|
|
|
|
|
|
285,000
|
(1)
|
|
|
8,212,350
|
|
Kiran M. Patel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert B. Henske
|
|
|
47,222
|
|
|
|
533,472
|
|
|
|
3,000
|
|
|
|
94,680
|
|
Alexander M. Lintner
|
|
|
116,200
|
|
|
|
953,781
|
|
|
|
|
|
|
|
|
|
Brad D. Smith
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey E. Stiefler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This includes 170,000 shares that vested under
Mr. Bennetts July 30, 2003 award of 850,000
restricted stock units. Under this award, as described in
footnote 2 to the table titled Outstanding Stock
Awards above, the vesting of this award occurs separate
and apart from the issuance of the underlying shares to
Mr. Bennett. Therefore, Mr. Bennett will receive his
first issuance of 340,000 shares underlying this award on
January 2, 2008 and the remaining underlying shares will be
issued to Mr. Bennett on August 1, 2008. The remaining
115,000 shares reflected in this column relate to other
restricted stock units and restricted shares that vested during
fiscal 2007. |
Non-Qualified
Deferred Compensation for Fiscal Year 2007
The following table shows the non-qualified deferred
compensation activity for each Named Executive Officer during
fiscal year 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Executive
|
|
|
Intuit
|
|
|
Aggregate
|
|
|
Balance at
|
|
|
|
Contributions in
|
|
|
Contributions in
|
|
|
Earnings in
|
|
|
July 31,
|
|
|
|
Fiscal 2007 ($)(1)
|
|
|
Fiscal 2007 ($)(2)
|
|
|
Fiscal 2007 ($)(3)
|
|
|
2007 ($)(4)
|
|
|
Stephen M. Bennett
|
|
|
|
|
|
|
172,463
|
|
|
|
18,355
|
|
|
|
450,638
|
|
Kiran M. Patel
|
|
|
488,965
|
|
|
|
344,925
|
|
|
|
142,485
|
|
|
|
976,375
|
|
Robert B. Henske
|
|
|
|
|
|
|
|
|
|
|
177,832
|
|
|
|
1,301,110
|
|
Alexander M. Lintner
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad D. Smith
|
|
|
|
|
|
|
|
|
|
|
41,691
|
|
|
|
264,331
|
|
Jeffrey E. Stiefler
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amount in this column is included in the Summary
Compensation Table in the Non-Equity Incentive Plan
Compensation column. |
|
(2) |
|
Amounts shown in this column are included in the Summary
Compensation table in the All Other Compensation
column. Amounts in this column reflect the net amount of
Intuits contribution, after tax withholding. |
|
(3) |
|
None of these amounts are included in the Summary Compensation
table because they are not preferential or above market. |
|
(4) |
|
These amounts reflect the accumulation of each Named Executive
Officers aggregate balance as of August 1, 2006 plus
the amounts noted for each Named Executive Officer in each of
the three prior columns. |
In 2007, we adopted a new Non-Qualified Deferred Compensation
Plan (the NQDCP) that will become effective
January 1, 2008. We adopted the NQDCP to meet the
requirements of the new restrictions on deferred compensation
under Section 409A of the Internal Revenue Code. The NQDCP
was designed to generally track the provisions of our 2005
Non-Qualified Deferred Compensation Plan, effective
January 1, 2005, and the original Executive Deferred
Compensation Plan that became effective March 15, 2002. All
deferrals for compensation that
34
would otherwise be payable on or after January 1, 2008 and
employer contributions made on or after January 1, 2008 are
credited to participants under the new NQDCP. No new deferrals
or contributions will be made to the 2005 Non-Qualified Deferred
Compensation Plan or the original plan. The NQDCP and the 2005
Non-Qualified Deferred Compensation Plan provide that executives
who meet minimum compensation requirements are eligible to defer
up to 50% of their salaries and up to 90% of their bonuses. We
have agreed to credit the participants contributions with
earnings that reflect the performance of certain independent
investment funds. We may also make discretionary employer
contributions to participant accounts in certain circumstances.
The timing, amounts and vesting schedules of employer
contributions are at the sole discretion of the Compensation
Committee or its delegate. The benefits under this plan are
unsecured and are general assets of Intuit. Participants are
generally eligible to receive payment of their vested benefit at
the end of their elected deferral period or after termination of
their employment with Intuit for any reason or at a later date
to comply with the restrictions of Section 409A.
Discretionary company contributions and the related earnings
vest completely upon the participants disability, death or
a change of control of Intuit.
Potential
Payments Upon Termination of Employment or Change in
Control
Described below are the individual arrangements Intuit has
entered into with each of our Named Executive Officers and the
estimated payments and benefits that would be provided under
such arrangements, assuming that the executives employment
terminated under certain circumstances as of July 31, 2007,
and using the closing price of our common stock on July 31,
2007 ($28.64 per share).
As a general matter, certain benefits which are included in the
tables provided below are provided to all recipients of Intuit
equity awards, not solely to Named Executive Officers. For
example, Intuits options and RSUs generally provide for
100% acceleration of vesting upon termination due to death or
disability. Additionally, Intuits options generally
provide for one year of accelerated vesting upon a
recipients involuntary termination within one year
following a change in control (CIC), as defined in
our 2005 Equity Incentive Plan. Intuits RSUs generally
provide for pro rata accelerated vesting upon a recipients
involuntary termination within one year following a change in
control or upon a recipients retirement, as defined in the
applicable plan document. None of the Named Executive Officers
would have been eligible for retirement, for purposes of such
RSU vesting acceleration, had they been terminated as of
July 31, 2007.
Intuit does not provide for any special severance payments or
acceleration of equity upon a Named Executives termination
for cause or resignation without good cause. Upon termination of
employment for any reason, participants in the NQDCP will be
eligible to receive their vested benefits under that plan, as
described above under Non-Qualified Deferred Compensation
for Fiscal Year 2007.
In April 2007, Intuit put in place a Long-Term Executive
Disability Plan (the Executive Disability Plan) for
employees with the title of director or above. Under the
Executive Disability Plan, if a participant suffers a long-term
disability, as defined in the applicable plan document, this
insured plan provides for salary restoration up to $8,000 per
month over the benefits provided by Intuits Long-Term
Disability Plan for all employees, until the earlier of the
cessation of the disability or the participant reaching
age 65. None of the Named Executive Officers would have
been eligible for benefits under the Executive Disability Plan
if they had terminated due to disability on July 31, 2007,
because the plans initial eligibility period had not been
completed.
Stephen
M. Bennett
On August 21, 2007 (the Agreement Date), Intuit
entered into a Transition Agreement with Mr. Bennett
providing for Mr. Bennetts resignation as President
and Chief Executive Officer of Intuit, effective as of
January 1, 2008 (the Separation Date). This
agreement supersedes the prior July 30, 2003 employment
agreement with Mr. Bennett. We are unable to reasonably
quantify the benefits Mr. Bennett would have received under
this agreement upon his hypothetical termination as of
July 31, 2007, since the Transition Agreement was entered
into following that date and sets forth the actual benefits
which will be paid to Mr. Bennett upon his resignation on
January 1, 2008. Following is a narrative summary of the
terms of the Transition Agreement. This summary is qualified in
its entirety by reference to the text of the Transition
Agreement which was filed with the SEC on a
Form 8-K
on August 22, 2007.
35
Under the Transition Agreement and subject to certain terms and
conditions set forth therein, Intuit and Mr. Bennett
agreed, among other things, that Mr. Bennett would continue
to act as President and CEO until January 1, 2008, then
would become a full-time consultant to Intuit until
July 31, 2008, at a monthly rate of $91,700, equal to his
current base salary. Mr. Bennett will also continue as a
member of the Board following January 1, 2008. Intuit will
provide Mr. Bennett and his spouse with continued access to
core medical coverage at Mr. Bennetts cost from
January 1, 2008 through the earlier of (a) the date
that he and his spouse become eligible for group medical
coverage by another employer; (b) each of their respective
Medicare eligibility dates; or (c) their respectively
attaining age 65. Intuit also agreed to pay
Mr. Bennett a lump sum payment of $550,000 equal to six
months of his base salary, and he remains eligible for his
annual bonus for fiscal 2008 of up to $1,760,000, at the
discretion of the Compensation Committee. Mr. Bennett was
granted 50,000 stock options and 50,000 RSUs, both of which are
scheduled to vest on July 31, 2008, so long as
Mr. Bennett provides service as a member of the Board
through July 31, 2008.
With respect to the restricted stock granted to Mr. Bennett
on January 24, 2000, the remaining 45,000 restricted shares
which would have vested in 2008, 2009 and 2010 will immediately
vest on January 1, 2008. With respect to RSUs granted to
Mr. Bennett prior to fiscal 2008, 172,221 RSUs that would
otherwise not have vested until July 31, 2008 will vest on
January 1, 2008, pursuant to pro rata acceleration
provisions of those RSU awards. Mr. Bennetts
remaining 147,779 unvested RSUs granted prior to fiscal 2008
will vest as originally scheduled by July 31, 2008, subject
to Mr. Bennetts continuing Board service and, as
applicable, the achievement of performance goals under certain
of those RSUs.
With regard to stock options granted to Mr. Bennett on
January 24, 2000, the period to exercise such options will
terminate three months following the Separation Date.
Mr. Bennetts right to vest in and exercise his other
outstanding options will continue while he continues to provide
service as a member of the board.
Mr. Bennetts lump sum payment following the
termination of his employment and his rights with respect to any
accelerated vesting of his restricted stock and restricted stock
units are subject to his compliance with certain covenants in
favor of Intuit set forth in the Transition Agreement. In
addition, the Transition Agreement includes
Mr. Bennetts general release of claims against Intuit.
The following table illustrates the estimated incremental
payments or benefits to be provided to Mr. Bennett on
January 1, 2008 under his Transition Agreement, The
hypothetical value of accelerated restricted stock and RSUs was
calculated using the closing price of our common stock on
July 31, 2007 ($28.64 per share).
|
|
|
|
|
Stephen M. Bennett
|
|
Estimated
|
|
Incremental Amounts Payable on January 1, 2008
|
|
Value ($)
|
|
|
Cash Severance
|
|
|
550,000
|
|
Gain on Accelerated Stock Options
|
|
|
0
|
|
Value of Accelerated Restricted Stock/ RSUs
|
|
|
6,221,209
|
|
|
|
|
|
|
Total Value of Accelerated Long-Term Incentives
|
|
|
6,221,209
|
|
|
|
|
|
|
Total Severance, Benefits & Accelerated Equity
(1)
|
|
|
6,771,209
|
|
|
|
|
(1) |
|
Does not include the value of Mr. Bennetts monthly
consulting fees, potential annual bonus for fiscal 2008 or
continued vesting of options and RSUs during his service as a
Board member, as further described above. |
Pursuant to Mr. Bennetts January 24, 2000
employment agreement, Intuit provided Mr. Bennett with a
$4,375,000 relocation loan on February 17, 2000 to purchase
a home close to Intuits corporate offices. The note is
interest free for so long as Mr. Bennett is providing
services to Intuit and is secured by a senior interest in
Mr. Bennetts residence. The entire loan balance
becomes due and payable 90 days following
Mr. Bennetts resignation or termination for cause, or
two years following Mr. Bennetts termination for any
other reason, but in no event later than February 17, 2010.
As of October 1, 2007, the outstanding principal balance on
this loan was $4,375,000, which is the most principal
Mr. Bennett owed under the loan since the beginning of
fiscal 2007.
The Sarbanes-Oxley Act of 2002 prohibits us from making future
loans to executive officers and from materially amending any
outstanding loans to executive officers.
36
Alexander
M. Lintner
On June 24, 2005, Intuit entered into an employment
agreement with Mr. Lintner. Under that agreement, if Intuit
terminates Mr. Lintners employment other than for
Cause (which includes gross negligence, willful
misconduct, fraud and certain criminal convictions), then
Mr. Lintner will be entitled to a single lump sum severance
payment equal to six months of his then current salary provided
he signs a release and waiver of claims.
The estimated payments or benefits which would have been paid to
Mr. Lintner in the event of his termination on
July 31, 2007 under the specified circumstances are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Alexander M. Lintner
|
|
|
|
|
Termination
|
|
|
|
|
Incremental Amounts Payable
|
|
Involuntary Termination or
|
|
|
w/o Cause
|
|
|
Death or
|
|
Upon Termination Event
|
|
Termination w/o Cause ($)
|
|
|
After CIC ($)
|
|
|
Disability ($)
|
|
|
Total Cash Severance
|
|
|
270,000
|
|
|
|
270,000
|
|
|
|
N/A
|
|
Total Benefits & Perquisites
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance
|
|
|
270,000
|
|
|
|
270,000
|
|
|
|
0
|
|
Gain on Accelerated Stock Options
|
|
|
0
|
|
|
|
357,000
|
|
|
|
421,000
|
|
Value of Accelerated Restricted Stock/ RSUs
|
|
|
180,000
|
|
|
|
221,000
|
|
|
|
559,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Value of Accelerated Long-Term Incentives
|
|
|
180,000
|
|
|
|
578,000
|
|
|
|
980,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance, Benefits & Accelerated Equity
|
|
|
450,000
|
|
|
|
848,000
|
|
|
|
980,000
|
|
Kiran
M. Patel
On September 2, 2005, Intuit entered into an employment
agreement with Mr. Patel. Under the terms of this
agreement, if Intuit terminates Mr. Patels employment
other than for Cause (which includes gross
negligence, willful misconduct, fraud and certain criminal
convictions), or Mr. Patel terminates his employment for
Good Reason (which includes relocation or a
reduction in duties, title or compensation), or if within one
year after any change of control of Intuit, Mr. Patel is
not a Section 16 officer of the surviving entity or
acquirer or his employment ends for reasons other than cause or
his resignation, then in each case, Mr. Patel will be
entitled to the following separation benefits provided he signs
a release and waiver of claims: (1) a single lump sum
severance payment equal to 18 months of his then current
salary, (2) one and one-half times his target bonus for the
then current fiscal year and (3) accelerated vesting of his
850,000-share new hire option equal to the number of shares that
would have vested over the next 18 successive months.
The estimated payments or benefits which would have been paid to
Mr. Patel in the event of his termination on July 31,
2007 under the specified circumstances are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Kiran M. Patel
|
|
|
|
|
Termination
|
|
|
|
|
Incremental Amounts Payable
|
|
Involuntary Termination or
|
|
|
w/o Cause
|
|
|
Death or
|
|
Upon Termination Event
|
|
Termination w/o Cause ($)
|
|
|
After CIC ($)
|
|
|
Disability ($)
|
|
|
Total Cash Severance
|
|
|
1,838,000
|
|
|
|
1,838,000
|
|
|
|
N/A
|
|
Total Benefits & Perquisites
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance
|
|
|
1,838,000
|
|
|
|
1,838,000
|
|
|
|
0
|
|
Gain on Accelerated Stock Options
|
|
|
2,293,000
|
|
|
|
2,293,000
|
|
|
|
2,293,000
|
|
Value of Accelerated Restricted Stock/ RSUs
|
|
|
148,000
|
|
|
|
195,000
|
|
|
|
444,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Value of Accelerated Long-Term Incentives
|
|
|
2,441,000
|
|
|
|
2,488,000
|
|
|
|
2,737,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance, Benefits & Accelerated Equity
|
|
|
4,279,000
|
|
|
|
4,326,000
|
|
|
|
2,737,000
|
|
37
Brad
D. Smith
On September 6, 2005, Intuit entered into an employment
agreement with Mr. Smith, which amended his original
May 10, 2005 offer letter. This agreement did not provide
for any specialized severance provisions.
The estimated payments or benefits which would have been paid to
Mr. Smith under his September 6, 2005 employment
agreement in the event of his termination on July 31, 2007
under the specified circumstances are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Brad D. Smith
|
|
|
|
|
Termination
|
|
|
|
|
Incremental Amounts Payable
|
|
Involuntary Termination or
|
|
|
w/o Cause
|
|
|
Death or
|
|
Upon Termination Event
|
|
Termination w/o Cause ($)
|
|
|
After CIC ($)
|
|
|
Disability ($)
|
|
|
Total Severance(1)
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Gain on Accelerated Stock Options
|
|
|
0
|
|
|
|
536,000
|
|
|
|
536,000
|
|
Value of Accelerated Restricted Stock/ RSUs
|
|
|
326,000
|
|
|
|
349,000
|
|
|
|
1,025,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Value of Accelerated Long-Term Incentives
|
|
|
326,000
|
|
|
|
885,000
|
|
|
|
1,561,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance, Benefits & Accelerated Equity
|
|
|
326,000
|
|
|
|
885,000
|
|
|
|
1,561,000
|
|
|
|
|
(1) |
|
Under the terms of Mr. Smiths new employment
agreement dated October 1, 2007, as described further
below, in the event of his involuntary termination, termination
without cause or termination without cause following a change in
control, Mr. Smith would have hypothetically been eligible
for cash severance in the amount of $1,050,000, had such
agreement been in place on July 31, 2007. |
On October 1, 2007, we entered into a new employment
agreement, which superseded Mr. Smiths prior
September 6, 2005 employment agreement and which provides
that Mr. Smith will become the President and Chief
Executive Officer of Intuit, effective January 1, 2008.
Under this new agreement, Mr. Smiths base salary is
$800,000 and his target bonus is 120% of his base salary. He is
paid a bonus only if he attains performance goals established by
the Compensation and Organizational Development Committee. We
also agreed to reimburse Mr. Smith for up to $20,000 each
year for 2007 and 2008 towards the cost of his financial and
legal advisors. Pursuant to this agreement, on the seventh
business day of February 2008, Mr. Smith will be granted a
stock option for 260,000 shares that vests over five years
and 130,000 restricted stock units that will vest over four
years.
Mr. Smith can terminate the employment agreement at any
time upon written notice to the Board of Directors. Intuit may
terminate Mr. Smiths employment upon the written
recommendation of the Board of Directors. Under the
circumstances described below, Mr. Smith is entitled to
receive severance benefits subject to his execution of a valid
and binding release agreement.
If Intuit terminates Mr. Smith other than for
Cause (which includes gross negligence, willful
misconduct, fraud and certain criminal convictions) or if
Mr. Smith terminates his employment for Good
Reason (which includes relocation or a reduction in
duties, title or compensation), Mr. Smith is entitled to
(1) severance pay equal to 12 months of his
then-current salary and 100% of his then-current target bonus,
(2) vesting of a pro rata portion of the shares issuable
under the 260,000 stock options that will be granted in 2008,
based on the portion of time he has provided services over the
full five year vesting period, and (3) vesting of a pro
rata portion of the shares issuable under the 130,000 restricted
stock units that will be granted in 2008, based on the portion
of time he has provided services over the full four year vesting
period.
Jeffrey
E. Stiefler
On November 29, 2006, Intuit entered into an employment
agreement with Mr. Stiefler, which became effective upon
the close of Intuits acquisition of Digital Insight
Corporation (the Acquisition), of which
Mr. Stiefler was the President and Chief Executive Officer.
Under the terms of this agreement, Mr. Stieflers
salary was $600,000 and he is eligible to receive an annual
performance bonus with a target of 75% of his base salary.
Pursuant to this agreement, Mr. Stiefler was granted a
stock option for 100,000 shares that vests over two years
and
38
100,000 performance-based restricted stock units which vest upon
the 30-month
anniversary of the Acquisition, provided certain performance and
revenue hurdles are achieved.
In addition, Mr. Stiefler was awarded a lump sum payment of
$1,777,661 upon the close of the Acquisition, upon
Mr. Stieflers agreement to a release of claims.
If Intuit terminates Mr. Stieflers employment other
than for Cause (which includes gross negligence,
willful misconduct, fraud and certain criminal convictions), or
Mr. Stiefler terminates his employment for Good
Reason (which includes relocation or a reduction in
duties, title or compensation) prior to February 7, 2008,
then in each case, Mr. Stiefler will be entitled to
accelerated pro-rata vesting of his 100,000-share new hire
option, based on the portion of time he has provided services
over the full two year vesting period.
The estimated payments or benefits which would have been paid to
Mr. Stiefler in the event of his termination on
July 31, 2007 under the specified circumstances are as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Jeffrey E. Stiefler
|
|
|
|
|
Termination
|
|
|
|
|
Incremental Amounts Payable
|
|
Involuntary Termination or
|
|
|
w/o Cause
|
|
|
Death or
|
|
Upon Termination Event
|
|
Termination w/o Cause ($)
|
|
|
After CIC ($)
|
|
|
Disability ($)
|
|
|
Total Severance
|
|
|
0
|
|
|
|
0
|
|
|
|
0
|
|
Gain on Accelerated Stock Options
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
42,000
|
|
Value of Accelerated Restricted Stock/ RSUs
|
|
|
0
|
|
|
|
0
|
|
|
|
2,864,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Value of Accelerated Long-Term Incentives
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
2,906,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Severance, Benefits & Accelerated Equity
|
|
|
8,000
|
|
|
|
8,000
|
|
|
|
2,906,000
|
|
On September 10, 2007, Intuit amended the terms of
Mr. Stieflers agreement to provide for
Mr. Stieflers transition to the role of chairman of
an Advisory Board for the Intuit Financial Institutions Division.
Robert
B. Henske
On May 15, 2005, Intuit entered into a new employment
agreement with Robert B. Henske. This agreement was subsequently
amended on September 6, 2005. Under this agreement, as
amended, Mr. Henskes base salary would be no lower
than $560,000 and he was eligible for an annual performance
bonus, with a target of 75% of his base salary. Pursuant to that
agreement, Intuit also made a fully vested employer contribution
to Mr. Henskes Executive Deferred Compensation Plan
account in the amount of $350,000 in January 2006. Additionally,
Mr. Henske received monthly relocation assistance in order
to facilitate his relocation pursuant to his position as Senior
Vice President, Consumer Tax Group.
On June 14, 2007, Intuit entered into a Transition Terms
Agreement with Mr. Henske providing for
Mr. Henskes resignation as Senior Vice President of
the Consumer Tax Group. This agreement superseded
Mr. Henskes prior employment agreement and provided
for Mr. Henskes continued service to Intuit through
August 10, 2007. Mr. Henske received a lump sum
payment of $875,000 and was eligible for his annual bonus for
fiscal 2007, which was paid in August 2007 in the amount of
$720,000. Mr. Henske also received accelerated vesting of
10,388 additional RSUs. In addition, the agreement included
Mr. Henskes general release of claims against Intuit.
TRANSACTIONS
WITH RELATED PERSONS
The Audit Committee is responsible for review, approval or
ratification of specific transactions involving Intuit (or its
subsidiaries) in which a related person has a direct
or indirect material interest. Under SEC rules, related
persons include directors, officers, nominees for
director, 5% stockholders and their immediate family members.
Intuit follows a set of procedures and guidelines to evaluate
these transactions and obtain approval or ratification by the
Audit Committee.
39
Identification of Related Persons. Information
about our directors and executive officers and persons related
to them is collected and updated through annual
Director & Officer Questionnaires and quarterly
director affiliation summaries. Directors and executives provide
the names of the entities with which they are affiliated,
including board memberships, executive officer positions,
charitable organizations, and affiliations of immediate family
members.
Audit Committee Annual Pre-Approval. On an
annual basis, Intuits procurement and legal departments
prepare requests for pre-approval of transactions or
relationships involving related persons or parties with which
Intuit is expected to do business during the upcoming fiscal
year. The Audit Committee reviews these requests during its
regular fourth quarter meeting and generally pre-approves annual
spending levels for each transaction or relationship.
Periodic Approvals. During the year, the list
of known related persons is circulated to appropriate Intuit
employees and is used to identify transactions with related
persons. When Intuit identifies an actual or potential
transaction with a related person that was not pre-approved by
the Audit Committee, Intuits Legal and Compliance
Organization collects information regarding the transaction,
including the identity of the other party, the value of the
transaction, and the size and significance of the transaction to
both Intuit and the other party. This information is provided to
the Audit Committee, which, in its discretion may approve,
ratify, rescind, place conditions upon, or take any other action
with respect to the transaction.
Monitoring of Approved Transactions and
Relationships. Following approval by the Audit
Committee, Intuit personnel review and monitor the transactions
and relationships from time to time. If spending levels approach
the limits approved by the Audit Committee, Intuit prepares and
submits a new approval request to the Audit Committee for review
at its next meeting.
Compensation Decisions. The Audit Committee
generally does not review executive or director compensation
transactions or arrangements, as these are approved by the
Compensation Committee or the Board, as appropriate.
Since the beginning of fiscal year 2007, there have been no
transactions in excess of $120,000 between Intuit (or its
subsidiaries) and a related person in which the related person
had a direct or indirect material interest.
REPORT
OF THE AUDIT COMMITTEE
We, the members of the Audit Committee, assist the Board of
Directors in fulfilling its responsibilities by overseeing
Intuits accounting and financial reporting processes, the
qualifications, independence and performance of Intuits
independent auditor, the performance of Intuits internal
audit department and Intuits internal controls. We also
are responsible for selecting, evaluating and setting the
compensation of Intuits independent auditor. Intuits
management is responsible for the preparation, presentation and
integrity of Intuits financial statements, including
setting accounting and financial reporting principles and
designing Intuits system of internal control over
financial reporting. The Audit Committee has selected the
independent registered public accounting firm of
Ernst & Young LLP as Intuits independent
auditor, with responsibility for performing an independent audit
of Intuits consolidated financial statements and for
expressing opinions on the conformity of Intuits audited
financial statements with generally accepted accounting
principles and on the effectiveness of Intuits internal
control over financial reporting based on their audit. The Audit
Committee oversees the processes, although members of the Audit
Committee are not engaged in the practice of auditing or
accounting.
During the fiscal year ended July 31, 2007, the Audit
Committee carried out the duties and responsibilities as
outlined in its charter, including the following specific
actions:
Reviewed and discussed Intuits quarterly earnings
announcements, consolidated financial statements, and related
periodic reports filed with the SEC, with management and the
independent auditor;
Reviewed with management its assessment of the effectiveness of
Intuits internal control over financial reporting;
Reviewed with the independent auditor and management the audit
scope and plan;
40
Reviewed the internal audit plan with the internal
auditor; and
Met in periodic executive sessions with each of the independent
auditor, representatives of management, and the internal auditor.
We reviewed and discussed with management and representatives of
Ernst & Young the audited financial statements for the
fiscal year ended July 31, 2007 and Ernst &
Youngs opinion on the audited financial statements and the
effectiveness of Intuits internal control over financial
reporting. Ernst & Young represented that its
presentations included the matters required to be discussed with
the Audit Committee by Statement on Auditing Standards
No. 61, as amended, as adopted by the PCAOB in
Rule 3200T.
The Audit Committee recognizes the importance of maintaining the
independence of Intuits independent auditor, both in fact
and appearance. Consistent with its charter, the Audit Committee
has evaluated Ernst & Youngs qualifications,
independence and performance. The Audit Committee has
established a policy pursuant to which all services, audit and
non-audit, provided by the independent auditor must be
pre-approved by the Audit Committee or its delegate.
Intuits pre-approval policy is more fully described in
this proxy statement under the caption
Proposal No. 2 Ratification of
Selection of Independent Registered Public Accounting
Firm. The Audit Committee has concluded that provision of
the services described in that section is compatible with
maintaining the independence of Ernst & Young. In
addition, we have received the written disclosures and the
letter from Ernst & Young required by Independence
Standards Board Standard No. 1, Independence
Discussions with Audit Committees, as adopted by the PCAOB
in Rule 3600T, and discussed with Ernst & Young
the firms independence.
Based on the reports, discussions and review described in this
report, and subject to the limitations on our role and
responsibilities referred to in this report and in the charter,
we recommended to the Board of Directors that the audited
financial statements be included in Intuits Annual Report
on
Form 10-K
for fiscal 2007. We also selected Ernst & Young LLP as
Intuits independent registered public accounting firm for
fiscal 2008.
AUDIT COMMITTEE MEMBERS
Christopher W. Brody*
Diane B. Greene
Michael R. Hallman*
Suzanne Nora Johnson
Dennis D. Powell, Chairman
*These directors were members of the Audit Committee through
October 22, 2007.
ELECTION
OF DIRECTORS
Each of our directors stands for election on an annual basis. We
do not have a classified or staggered Board. The Nominating and
Governance Committee, consisting solely of independent
directors, as determined by the Board under applicable NASDAQ
listing standards, recommended the directors for nomination by
our full Board. Based on that recommendation, our Board has
nominated those directors for election at the Meeting.
41
Nominees
The following ten incumbent directors are nominated for election
to the Board: Stephen M. Bennett, Christopher W. Brody, William
V. Campbell, Scott D. Cook, Diane B. Greene, Michael R. Hallman,
Edward A. Kangas, Suzanne Nora Johnson, Dennis D. Powell and
Stratton D. Sclavos.
Each nominee, if elected, will serve until the next annual
meeting of stockholders and until a qualified successor is
elected, unless the nominee resigns or is removed from the Board
before then. Although we know of no reason why any of the
nominees would not be able to serve, if any nominee is
unavailable for election, the proxies will vote your shares to
approve the election of any substitute nominee proposed by the
Board. Please see Directors Standing for Election on
page 4 of this proxy statement for information concerning
each of our incumbent directors standing for election.
Directors will be elected by a plurality of the votes cast by
the shares of common stock present (either in person or by
proxy) at the Meeting. Broker non-votes will have no effect on
the outcome of the election of directors. This means that the
ten nominees with the most votes will be elected.
The Board recommends that you vote
FOR the election of each of the nominated directors.
RATIFICATION
OF SELECTION OF
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
Intuits Audit Committee has selected Ernst &
Young LLP as the independent registered public accounting firm
to perform the audit of Intuits consolidated financial
statements and the effectiveness of internal control over
financial reporting for the fiscal year ending July 31,
2008, and as a matter of good corporate governance we are asking
stockholders to ratify this selection. Representatives of
Ernst & Young are expected to attend the Meeting. They
will have the opportunity to make a statement at the Meeting if
they wish to do so, and they will be available to respond to
appropriate questions from stockholders.
The Audit
Committees Policy on Pre-Approval of Services Performed by
the Independent Registered Public Accounting Firm
It is the policy of the Audit Committee to pre-approve near the
beginning of each fiscal year all audit and permissible
non-audit services to be provided by the independent registered
public accounting firm during that fiscal year. The Audit
Committee authorizes specific projects within categories of
services, subject to a budget for each project. The Audit
Committee may also pre-approve particular services during the
fiscal year on a
case-by-case
basis. The independent auditor and management periodically
report to the Audit Committee the actual fees incurred versus
the pre-approved budget.
Fees Paid
to Ernst & Young LLP
The following table shows fees that we paid (or accrued) for
professional services rendered by Ernst & Young for
fiscal 2007 and 2006:
|
|
|
|
|
|
|
|
|
|
|
Fiscal
|
|
|
Fiscal
|
|
Fees Category
|
|
2007
|
|
|
2006
|
|
|
Audit Fees
|
|
$
|
3,604,000
|
|
|
$
|
3,480,000
|
|
Audit-Related Fees
|
|
|
1,876,000
|
|
|
|
1,190,000
|
|
Tax Fees
|
|
|
|
|
|
|
|
|
All Other Fees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total All Fees
|
|
$
|
5,480,000
|
|
|
$
|
4,670,000
|
|
|
|
|
|
|
|
|
|
|
42
Audit
Fees
These fees consist of amounts for professional services rendered
in connection with the integrated audit of our financial
statements and internal control over financial reporting, review
of the interim financial statements included in quarterly
reports, and statutory and regulatory filings or engagements.
Fiscal 2007 audit fees included procedures performed in support
of our issuance of $1 billion in senior notes in connection
with our acquisition of Digital Insight. Fiscal 2006 audit fees
included the review of the accounting treatment of historical
stock option grants.
Audit-Related
Fees
These fees consist of amounts for assurance and related services
that are reasonably related to the performance of the audit or
review of our financial statements that are not reported under
Audit Fees. The increase from fiscal 2006 to 2007
was primarily due to increased fees for audits of our Intuit
Distribution Management Solutions (IDMS) and Intuit Real Estate
Solutions businesses. We completed the sale of IDMS in August
2007.
Tax
Fees
Intuit paid no tax fees to Ernst & Young in fiscal
2007 or fiscal 2006.
All
Other Fees
Intuit paid no other fees to Ernst & Young in fiscal
2007 or fiscal 2006.
For more information about Ernst & Young, please see
the Report of the Audit Committee on page 40.
Proposal No. 2 must be approved by a majority of the
votes cast on the proposal. Abstentions and broker non-votes
will not affect the outcome of the vote on this proposal. If the
selection of Ernst & Young is not ratified, the Board
will consider whether it should select another independent
registered public accounting firm.
The Board recommends that you vote
FOR the ratification of the selection of Ernst &
Young LLP.
APPROVAL
OF AN AMENDMENT TO THE 2005 EQUITY INCENTIVE PLAN
General
In October 2004, we asked our stockholders to approve the 2005
Equity Incentive Plan (the Plan), which we designed
to reflect our commitment to having best practices in both
compensation and corporate governance. At that time, we
committed to submitting the Plan to our stockholders for
re-approval on an annual basis. Annual approval gives our
stockholders the opportunity to consider and review our equity
compensation program each year and to vote on continuation of
the plan. When originally approved in 2004, the Plan extended to
December 9, 2006. In 2005, the stockholders approved an
amendment to the Plan in order to (1) extend the term of
the plan by an additional year, through December 9, 2007;
(2) provide for the addition of 13,000,000 shares to
cover awards under the Plan through its amended term; and
(3) amend the cap on equity awards that can be granted at
below fair market value (for example, restricted stock or RSUs)
to allow that up to 50% of the equity awards made under the Plan
each fiscal year can be below fair market value awards. In 2006,
the stockholders approved an amendment to the Plan in order to
(1) extend the term of the plan by an additional year,
through December 9, 2008; and (2) provide for the
addition of 10,000,000 shares to cover awards under the
Plan through its amended term.
We are now asking our stockholders to approve an amendment to
the Plan to (1) extend the term of the plan by an
additional year, through December 9, 2009; and
(2) provide for the addition of 10,000,000 shares to
cover awards under the Plan through its amended term.
We believe that our ability to attract and retain qualified,
high-performing employees is vital to our success and growth as
a company. Equity compensation is also a very effective
retention tool that encourages and rewards employee performance
that aligns with stockholders interests.
43
Proposal No. 3 must be approved by a majority of the
votes cast on the proposal. Abstentions and broker non-votes
will not affect the outcome of the vote on this proposal.
The Board of Directors recommends that you vote
FOR the amendment to the Intuit Inc. 2005 Equity Incentive
Plan.
Approval of the amendment to the Plan enables Intuit to achieve
the following objectives:
1. The continued ability of Intuit to offer stock-based
incentive compensation to Intuits eligible employees and
non-employee directors, while maintaining net annual dilution at
less than 3% of total shares outstanding. We are
requesting approval of 10,000,000 additional shares for the
Plan. The additional shares we are requesting should meet our
annual needs, but not result in a share burn rate in
excess of 3%. We are continually improving our use of equity
awards to carefully manage this increasingly limited resource
while providing for both grants to new hires and retention
grants for current employees.
2. Furthering compensation and governance best practices
through continuing use of the Plan. The Plan
prohibits stock option repricing and does not contain an
evergreen feature (evergreen features provide for automatic
replenishment of authorized shares available under an equity
plan). In order to continue these best practices, we are
requesting the term of the Plan be extended by one year,
resulting in the ability to continue granting awards under the
Plan through 2009.
Background
on Stock Compensation at Intuit
We believe that employee stock ownership is a significant
contributing factor in achieving superior financial performance.
Historically, Intuit has granted stock options and, more
recently, RSUs to the vast majority of its newly hired
employees, and this has been a vital component of Intuits
overall compensation philosophy. Recognizing that stock-based
compensation is a valuable and limited resource, Intuit has
actively managed its use of stock-based compensation. To that
end and consistent with our general pay-for-performance
compensation philosophy, only our higher performing employees
receive annual equity awards.
We believe that stock options align employees interests
directly with those of other stockholders, because the employee
only realizes value from an option if the stock price increases
after the date of the award. We also believe that restricted
stock units align employees interests directly with those
of other stockholders, as they provide greater value to
employees as Intuits stock price increases. Without
stock-based compensation, Intuit would be at a disadvantage
against competitor companies to provide a market-competitive
total compensation package necessary to attract, retain and
motivate the employee talent critical to the future success of
Intuit.
We strongly believe that our stock-based incentive programs and
emphasis on employee stock ownership have been integral to our
success in the past and will continue to be important to our
ability to achieve consistently superior performance in the
years ahead. Therefore, we consider approval of the amendment to
the Plan vital to Intuits continued success.
Purpose
of the Plan
The Plan as proposed to be amended will allow Intuit, under the
direction of the Compensation and Organizational Development
Committee (the Compensation Committee), to make
broad-based grants of stock options, restricted stock awards,
restricted stock units, stock appreciation rights and stock
bonus awards to employees and non-employee directors. The
purpose of these stock awards is to attract and retain talented
employees and non-employee directors, further align their
interests and those of our stockholders and continue to link
employee compensation with Intuits performance.
44
Key Terms
of the Plan
The following is a summary of the key provisions of the Plan,
assuming that stockholders approve this
Proposal No. 3. This summary does not purport to be a
complete description of all the provisions of the Plan, and it
is qualified in its entirety by reference to the full text of
the Plan. A copy of the Plan has been filed with the SEC with
this proxy statement, and any stockholder who desires to obtain
a copy of the Plan may do so by written request to the Company
Secretary at Intuits headquarters in Mountain View,
California.
|
|
|
Plan Term:
|
|
December 9, 2004 to December 9, 2009
|
Eligible Participants:
|
|
Employees of Intuit and its subsidiaries, non-employee directors
of Intuit and consultants of Intuit and its subsidiaries are
eligible to receive awards under the Plan. As of
September 30, 2007, there were approximately 8,100
individuals eligible to participate in the Plan. The
Compensation Committee will determine which individuals will
participate in the Plan.
|
|
|
From August 1, 2006 through July 31, 2007, we granted
options and RSU awards for 14,278,897 shares under the
Plan. The number of awards received by each of our Named
Executive Officers, including Mr. Bennett, is provided in
the table titled Grants of Plan-Based Awards During Fiscal
2007 on page 29. During this period, we granted
awards for 1,616,118 shares to Intuits then current
executive officers as a group (11 people),
445,000 shares to all non-employee directors as a group and
12,662,761 shares to all employees (including all current
officers, other than the then current executive officers). The
closing price of Intuits Common Stock on the NASDAQ Stock
Market on September 28, 2007 was $30.30.
|
|
|
As of September 30, 2007, there were 4,410,221 shares
available for grant under the Plan. As of that date,
53,250,359 shares were issuable upon the exercise of
outstanding options granted under all of Intuits equity
compensation plans (including the other plans described more
fully on page 49). The weighted average exercise price of
these options was $24.14 per share and the average remaining
term of these options was 4.22 years. As of
September 30, 2007, Intuit had 4,661,012 outstanding
unvested restricted stock units and/or shares of restricted
stock.
|
Shares Authorized:
|
|
46,000,000, subject to adjustment only to reflect stock splits
and similar events
|
Award Types:
|
|
(1) Non-qualified and incentive stock options
|
|
|
(2) Restricted stock awards
|
|
|
(3) Restricted stock units
|
|
|
(4) Stock appreciation rights
|
|
|
(5) Stock bonus awards
|
Share Limit on Awards:
|
|
In any fiscal year, no more than 50% of the shares subject to
equity awards granted in such fiscal year may have an exercise
price or purchase price per share that is less than fair market
value on the applicable date of grant.
|
162(m) Share Limits:
|
|
So that awards may qualify under Section 162(m) of the
Internal Revenue Code, which permits performance-based
compensation meeting the requirements established by the IRS to
be excluded from the limitation on deductibility of compensation
in excess of $1 million paid to certain senior executives,
the Plan limits awards to individual participants as follows:
|
|
|
(1) No more than 6,000,000 shares may be made subject
to awards granted to an employee in the year of his or her hire;
and
|
|
|
(2) No more than 4,000,000 shares may be made subject
to awards granted to an employee in any other year.
|
45
|
|
|
|
|
These limits are greater than the number of options that Intuit
has granted to any individual in the past. We do not currently
intend to significantly increase our equity awards to executive
officers.
|
Vesting:
|
|
Determined by the Compensation Committee. Options generally vest
over three years.
|
Award Terms:
|
|
Stock options and stock appreciation rights will have a term no
longer than seven years. The Compensation Committee may make the
grant, issuance, retention and/or vesting of restricted stock
awards, restricted stock units and stock bonus awards contingent
upon continued employment with Intuit, the passage of time, or
such performance criteria and the level of achievement versus
such criteria as it deems appropriate.
|
Repricing Prohibited:
|
|
Repricing, or reducing the exercise price of a stock option or
stock appreciation right without stockholder approval is
prohibited. The Plan also prohibits the repurchase of any
outstanding underwater option (an option with an
exercise price greater than the then-current fair market value
of the stock).
|
Non-Employee
Director Awards
The Plan provides for stock option grants to non-employee
directors according to a non-discretionary formula, as described
more fully under Director Compensation on
page 13.
New Plan
Benefits
Intuits executive officers and directors have an interest
in approval of the Plan amendment because it relates to the
issuance of equity awards for which executive officers and
directors may be eligible. In the aggregate, 222,500 options
will be granted automatically each year to our non-employee
directors pursuant to the Plan option grant formula for
non-employee directors. The exercise prices of these options
will be 100% of the fair market value of our stock on the date
of grant.
Future awards under the Plan to executive officers and
employees, and any additional future discretionary awards to
non-employee directors in addition to those granted
automatically pursuant to the grant formula, are discretionary
and cannot be determined at this time.
Eligibility
Under Section 162(m)
Awards may, but need not, include performance criteria that
satisfy Section 162(m) of the Internal Revenue Code. To the
extent that awards are intended to qualify as
performance-based compensation under
Section 162(m), the performance criteria will be selected
from one of the following criteria, either individually,
alternatively or in any combination, applied to either the
company as a whole or to a business unit or subsidiary, either
individually, alternatively, or in any combination, and measured
either annually or cumulatively over a period of years, on an
absolute basis or relative to a pre-established target, to
previous years results or to a designated comparison
group, in each case as specified by the Compensation Committee
in the award:
|
|
|
|
|
Net revenue
and/or net
revenue growth
|
|
|
|
Operating income
and/or
operating income growth
|
|
|
|
Earnings per share
and/or
earnings per share growth
|
|
|
|
Return on equity
|
|
|
|
Adjusted operating cash flow return on income
|
|
|
|
Individual business objectives
|
|
|
|
Earnings before income taxes and amortization
and/or
earnings before income taxes and amortization growth
|
46
|
|
|
|
|
Net income
and/or net
income growth
|
|
|
|
Total stockholder return
and/or total
stockholder return growth
|
|
|
|
Operating cash flow return on income
|
|
|
|
Economic value added
|
To the extent that an award under the Plan is designated as a
performance award, but is not intended to qualify as
performance-based compensation under Section 162(m), the
performance criteria can include the achievement of strategic
objectives as determined by the Board.
Notwithstanding satisfaction of any performance criteria
described above, to the extent specified at the time of grant of
an award, the number of shares of common stock, stock options or
other benefits granted, issued, retainable
and/or
vested under an award on account of satisfaction of performance
criteria may be reduced by the Compensation Committee on the
basis of such further considerations as the Compensation
Committee in its sole discretion determines.
Transferability
Awards granted under the Plan are not transferable except by
will or the laws of descent and distribution except that the
Compensation Committee may consent to permit the transfer of a
non-qualified stock option. The 2005 Plan specifically prohibits
transfers by an individual for consideration.
Administration
The Compensation Committee will administer the Plan. The
Compensation Committee will select the individuals who receive
awards, determine the number of shares covered thereby, and,
subject to the terms and limitations expressly set forth in the
Plan, establish the terms, conditions and other provisions of
the awards. The Compensation Committee may interpret the Plan
and establish, amend and rescind any rules relating to the Plan,
including adoption of rules, procedures or sub-plans applicable
to particular subsidiaries or employees in particular locations.
The Compensation Committee may delegate to a committee of one or
more Intuit officers the ability to grant awards and take
certain other actions with respect to participants who are not
executive officers or directors (Intuits Equity Granting
Policy is described in the Compensation Discussion and Analysis
beginning on page 17.)
Amendments
The Board may terminate, amend or suspend the Plan, provided
that no action may be taken by the Board (except those described
in Adjustments) without stockholder approval to
amend the Plan in any manner that requires stockholder approval
pursuant to the Internal Revenue Code or the regulations
promulgated thereunder or pursuant to the Securities Exchange
Act of 1934 or any rule promulgated thereunder or pursuant to
NASDAQ rules.
Adjustments
In the event of a stock dividend, recapitalization, stock split,
combination of shares, extraordinary dividend of cash or assets,
reorganization, or exchange of Intuits common stock, or
any similar event affecting Intuits common stock, the
Compensation Committee shall adjust the number and kind of
shares available for grant under the 2005 Plan, and subject to
the various limitations set forth in the Plan, the number and
kind of shares subject to outstanding awards under the Plan, and
the exercise or settlement price of outstanding stock options
and of other awards.
The impact of a merger or other reorganization of Intuit on
outstanding awards granted under the Plan shall be specified in
the agreement relating to the merger or reorganization, subject
to the limitations and restrictions set forth in the Plan. Such
agreement may provide for, among other things, assumption of
outstanding awards, accelerated vesting or accelerated
expiration of outstanding awards, or settlement of outstanding
awards in cash. With regard to each outstanding stock option, in
the event an employee is terminated within one year of a merger
or other specified transaction, the stock option will vest as to
the number of shares that would have vested if the employee had
remained employed for 12 months following his or her date
of termination.
47
U.S. Tax
Consequences
Stock option grants under the Plan may be intended to qualify as
incentive stock options under Section 422 of the Internal
Revenue Code or may be non-qualified stock options governed by
Section 83 of the Internal Revenue Code. Generally, no
federal income tax is payable by a participant upon the grant of
a stock option and no deduction is taken by the company.
Intuits practice has been to grant non-qualified stock
options. Under current tax laws, if a participant exercises a
non-qualified stock option, he or she will have taxable income
equal to the difference between the market price of the common
stock on the exercise date and the stock option grant price.
Intuit will be entitled to a corresponding deduction on its
income tax return. A participant will have no taxable income
upon exercising an incentive stock option after the applicable
holding periods have been satisfied (except that alternative
minimum tax may apply), and Intuit will receive no deduction
when an incentive stock option is exercised. The treatment for a
participant of a disposition of shares acquired through the
exercise of an option depends on how long the shares were held
and on whether the shares were acquired by exercising an
incentive stock option or a non-qualified stock option. Intuit
may be entitled to a deduction in the case of a disposition of
shares acquired under an incentive stock option before the
applicable holding periods have been satisfied.
Restricted stock awards, stock bonus awards and restricted stock
units are governed by Section 83 of the Internal Revenue
Code. For restricted stock awards generally, no taxes are due
when the award is initially made, but the award becomes taxable
when it is no longer subject to a substantial risk of
forfeiture (i.e., becomes vested or transferable). Income
tax is paid on the value of the stock at ordinary rates when the
restrictions lapse, and then at capital gain rates when the
shares are sold. For stock bonus awards and restricted stock
units, the award becomes taxable when the shares are issued.
Income tax is paid on the value of the stock or units when the
shares are issued, and then at capital gain rates when the
shares are sold.
As described above, awards granted under the Plan may qualify as
performance-based compensation under
Section 162(m) of the Internal Revenue Code in order to
preserve federal income tax deductions by Intuit with respect to
annual compensation required to be taken into account under
Section 162(m) that is in excess of $1 million and
paid to one of Intuits five most highly compensated
executive officers. To so qualify, options and other awards must
be granted under the Plan by a committee consisting solely of
two or more outside directors (as defined under
regulations) and satisfy the Plans limit on the total
number of shares that may be awarded to any one participant
during any calendar year. In addition, for awards other than
options to qualify as performance-based
compensation, the issuance or vesting of the award, as the
case may be, must be contingent upon satisfying one or more of
the performance criteria described above, as established and
certified by a committee consisting solely of two or more
outside directors.
The Plan has been drafted to in order to avoid the application
of taxes, under Section 409A of the Internal Revenue Code,
on any participants.
48
EQUITY
COMPENSATION PLAN INFORMATION
The following table sets forth certain information, as of
July 31, 2007, concerning securities authorized for
issuance under all of Intuits equity compensation plans,
excluding the additional shares we are proposing to add to the
2005 Equity Incentive Plan in Proposal No. 3.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
Remaining
|
|
|
|
Number of
|
|
|
Weighted-
|
|
|
Available for
|
|
|
|
Securities to be
|
|
|
Average
|
|
|
Future Issuance
|
|
|
|
Issued Upon
|
|
|
Exercise
|
|
|
Under Equity
|
|
|
|
Exercise of
|
|
|
Price of
|
|
|
Compensation
|
|
|
|
Outstanding
|
|
|
Outstanding
|
|
|
Plans (Excluding
|
|
|
|
Options,
|
|
|
Options,
|
|
|
Securities
|
|
|
|
Warrants and
|
|
|
Warrants and
|
|
|
Reflected in
|
|
Plan Category
|
|
Rights (#)
|
|
|
Rights ($)
|
|
|
Column (a)) (#)
|
|
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders
|
|
|
55,613,243
|
(1)
|
|
|
24.18
|
(2)
|
|
|
9,684,801
|
(3)
|
Equity compensation plans not approved by security holders
|
|
|
2,097,382
|
(4)
|
|
|
20.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
57,710,625
|
|
|
|
24.05
|
(2)
|
|
|
9,684,801
|
|
|
|
|
(1) |
|
Represents 52,392,268 shares issuable upon exercise of
options and 3,220,975 shares issuable under RSU awards,
which are settled for shares of Intuit common stock on a
one-for-one basis. |
|
(2) |
|
RSUs have been excluded for purposes of computing
weighted-average exercise prices. |
|
(3) |
|
Represents 6,410,464 shares available for issuance under
our 2005 Equity Incentive Plan and 3,274,337 shares
available for issuance under our Employee Stock Purchase Plan. |
|
(4) |
|
Represents (i) outstanding options to purchase
816,643 shares at a weighted-average exercise price of
$20.00, which were granted under our 1998 Option Plan for
Mergers and Acquisitions; and (ii) outstanding options to
purchase 1,280,739 shares at a weighted-average exercise
price of $21.34, which were assumed in connection with corporate
acquisitions. |
EQUITY
COMPENSATION PLANS NOT APPROVED BY SECURITY HOLDERS
1998
Option Plan for Mergers and Acquisitions
In November 1998, our Board adopted the 1998 Option Plan for
Mergers and Acquisitions (the 1998 Plan) to grant
non-qualified stock options to individuals Intuit hires as a
result of acquisitions of, or mergers with, other companies. The
1998 Plan terminated on December 9, 2004 when stockholders
approved the 2005 Equity Incentive Plan. Options granted prior
to that date remain outstanding pursuant to their original terms
and conditions. Intuit no longer grants any equity awards under
the 1998 Plan.
Shares Subject to the 1998 Plan. As of
July 31, 2007, an aggregate of 816,643 shares remained
issuable upon exercise of options granted under the 1998 Plan.
If any option granted under the 1998 Plan expires or terminates
for any reason without being exercised in full, the unexercised
shares will not be available for grant by Intuit. All
outstanding options are subject to adjustment for any future
stock dividends, splits, combinations, or other changes in
capitalization as described in the 1998 Plan.
Other Plan Terms. Options under the 1998 Plan
could only be granted to employees, officers, consultants,
independent contractors and advisors of Intuit or any parent,
subsidiary or affiliate of Intuit hired as a result of a merger
or acquisition and within 18 months following the
completion of that acquisition or merger. If Intuit were
acquired and the acquiring corporation did not assume or replace
the awards granted under the 1998 Plan, or if Intuit were to
liquidate or dissolve, all outstanding awards would become fully
vested at such time and on such conditions as the Board
determined, and the awards would expire at the closing of the
transaction or at the time of dissolution or liquidation. If
Intuit were acquired and the acquiring company assumed the
outstanding options under the 1998
49
Plan, options granted on or after May 31, 2002 would
accelerate as to 12 months of vesting if the optionee were
terminated within one year following the acquisition.
ADOPTION
OF THE INTUIT INC. SENIOR EXECUTIVE INCENTIVE PLAN
We are asking our stockholders to approve adoption of the Intuit
Inc. Senior Executive Incentive Plan. The Compensation Committee
of the Board adopted the Senior Executive Incentive Plan on
October 23, 2007, subject to stockholder approval.
The Senior Executive Incentive Plan is a component of
Intuits overall strategy to pay its employees for
delivering measurable results. The purposes of the Senior
Executive Incentive Plan are to motivate senior executives (as
defined in the plan) by tying compensation to performance, to
reward exceptional performance that supports overall Intuit
objectives and to attract and retain top-performing senior
executives.
The Senior Executive Incentive Plan is intended to satisfy the
requirements for performance-based compensation
within the meaning of Section 162(m) of the Internal
Revenue Code (Section 162(m)). The Board
believes that it is in the best interests of Intuit and its
stockholders to ensure that bonuses to be paid to executive
officers are deductible by Intuit for federal income tax
purposes. Accordingly, Intuit has structured the Senior
Executive Incentive Plan to satisfy the requirements of
Section 162(m) of the Code for
performance-based compensation. Generally, under
Section 162(m), the federal income tax deductibility of
compensation paid to Intuits President and Chief Executive
Officer and each of the next three most highly compensated
executive officers (other than its Chief Financial Officer) may
be limited to the extent that it exceeds $1,000,000 in any one
year. Intuit can deduct compensation in excess of that amount if
the compensation qualifies as performance-based
compensation under Section 162(m).
One of the requirements of performance-based
compensation is that the material terms of the performance
goals under which compensation may be paid be disclosed to and
approved by Intuit stockholders. For purposes of
Section 162(m) the material terms include (i) the
employees eligible to receive compensation, (ii) a
description of the business criteria on which the performance
goal be based and (iii) the maximum amount of compensation
that can be paid to an employee under the performance goal. With
respect to awards under the Senior Executive Incentive Plan,
each of these aspects is discussed below, and stockholder
approval of the Senior Executive Incentive Plan is intended to
constitute approval of each of these aspects of the Senior
Executive Incentive Plan for purposes of the approval
requirements of Section 162(m).
Below is a summary of the principal provisions of the Senior
Executive Incentive Plan. We have attached the Senior Executive
Incentive Plan as Appendix B to this proxy statement, and
the following description of the Senior Executive Incentive Plan
is qualified in its entirety by reference to that Appendix.
Proposal No. 4 must be approved by a majority of the
votes cast on the proposal. Abstentions and broker non-votes
will not affect the outcome of this proposal.
The Board of Directors recommends a vote FOR
adoption of the Intuit Inc. Senior Executive Incentive
Plan
Background
The Compensation Committee will administer the Senior Executive
Incentive Plan. Compensation Committee members must qualify as
outside directors under Section 162(m) in order
for cash awards under the Executive Incentive Plan to qualify as
deductible performance-based compensation under
Section 162(m). Our Compensation Committee members meet
this requirement. Subject to the terms of the Senior Executive
Incentive Plan, the Compensation Committee has the sole
discretion to determine the key employees who will receive
awards and the amounts, terms and conditions of each award.
Under the Senior Executive Incentive Plan, during any Intuit
fiscal year no participant may receive an award of more than
$5,000,000.
50
Eligibility
In selecting participants for the Senior Executive Incentive
Plan, the Compensation Committee will choose those senior
executives (Senior Vice President and above) who the Committee
believes are most likely to make significant contributions to
Intuits success. The actual number of employees who will
receive awards under the Senior Executive Incentive Plan cannot
be determined in advance because eligibility for participation
is at the discretion of the Compensation Committee. However,
there are currently 17 employees who hold positions of
Senior Vice President or above. Participation in future years is
at the discretion of the Compensation Committee.
Senior
Executive Incentive Plan Awards
Under the Senior Executive Incentive Plan, the Compensation
Committee will determine the fiscal year or other performance
period for measuring actual performance (each a
Performance Period). The Compensation Committee will
establish for each Performance Period (a) the performance
goals based on business criteria and the target levels of
performance, and (b) a formula for calculating a
participants award based on actual performance compared to
the pre-established performance goals. Performance goals will be
based on one or more of the following business criteria:
revenue, operating income, net income, earnings per share,
return on net assets, cash flow, stockholder return, return on
investment, revenue growth, market share, strategic positioning,
return on equity, new product releases and employee productivity
and satisfaction metrics.
The Compensation Committee may set performance periods and
performance goals that differ from participant to participant.
For example, the Compensation Committee may designate
performance goals based on either Intuit-wide or business unit
results, as appropriate for the participants specific
responsibilities.
After the end of each Performance Period, the Compensation
Committee will determine the extent to which the performance
goals for each participant were achieved. The Compensation
Committee will determine the actual award (if any) for each
participant by the level of actual performance achieved.
However, the Compensation Committee retains discretion to
eliminate or reduce the actual award payable to any participant
below that which otherwise would be payable under the applicable
formula. Awards under the Executive Incentive Plan generally
will be payable in cash after the end of the Performance Period
during which the award was earned.
Fiscal
2008 Senior Executive Incentive Plan Benefits
Since payments under the Senior Executive Incentive Plan will be
determined by comparing actual performance to the performance
goals established by the Compensation Committee under this plan,
it is not possible to predict the amount of benefits that will
be paid under the Senior Executive Incentive Plan for any
Performance Period. Performance goals under the Executive
Incentive Plan for the Performance Period from August 1,
2007 through July 31, 2008 were established in October 2007.
Senior
Executive Incentive Plan Amendments
The Compensation Committee may amend or terminate the Senior
Executive Incentive Plan at any time and for any reason. In
order to maintain the plans qualification under
Section 162(m), material amendments of the Senior Executive
Incentive Plan will require stockholder approval.
51
INTUIT
INC.
Supplemental Information for the Compensation Discussion and
Analysis of the
Proxy Statement for the 2007 Annual Meeting of
Stockholders
INFORMATION
REGARDING NON-GAAP FINANCIAL MEASURES AND
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
TO MOST DIRECTLY COMPARABLE GAAP MEASURES
The Compensation Discussion and Analysis (CD&A)
beginning on page 17 of this proxy statement contains
non-GAAP financial measures. Table 1 on
page A-3
of this proxy statement reconciles the non-GAAP financial
measures in the CD&A to the most directly comparable
financial measures prepared in accordance with Generally
Accepted Accounting Principles (GAAP). These non-GAAP financial
measures include non-GAAP operating income (loss), non-GAAP net
income (loss) and non-GAAP net income (loss) per share.
Non-GAAP financial measures should not be considered as a
substitute for, or superior to, measures of financial
performance prepared in accordance with GAAP. These non-GAAP
financial measures do not reflect a comprehensive system of
accounting, differ from GAAP measures with the same names and
may differ from non-GAAP financial measures with the same or
similar names that are used by other companies.
We believe that these non-GAAP financial measures provide
meaningful supplemental information regarding Intuits
operating results primarily because they exclude amounts that we
do not consider part of ongoing operating results when assessing
the performance of the organization, our operating segments or
our senior management. Segment managers are not held accountable
for share-based compensation expenses, acquisition-related
costs, or the other excluded items that may impact their
business units operating income (loss) and, accordingly,
we exclude these amounts from our measures of segment
performance. We also exclude these amounts from our budget and
planning process. We believe that our non-GAAP financial
measures also facilitate the comparison of results for current
periods and guidance for future periods with results for past
periods. We exclude the following items from our non-GAAP
financial measures:
|
|
|
|
|
Share-based compensation expenses. Our
non-GAAP financial measures exclude share-based compensation
expenses, which consist of expenses for stock options,
restricted stock, restricted stock units and purchases of common
stock under our Employee Stock Purchase Plan. Segment managers
are not held accountable for share-based compensation expenses
impacting their business units operating income (loss)
and, accordingly, we exclude share-based compensation expenses
from our measures of segment performance. While share-based
compensation is a significant expense affecting our results of
operations, management excludes share-based compensation from
our budget and planning process. We exclude share-based
compensation expenses from our non-GAAP financial measures for
these reasons and the other reasons stated above. We compute
weighted average dilutive shares using the method required by
SFAS 123(R) for both GAAP and non-GAAP diluted net income
per share.
|
|
|
|
Amortization of purchased intangible assets and
acquisition-related charges. In accordance with
GAAP, amortization of purchased intangible assets in cost of
revenue includes amortization of software and other technology
assets related to acquisitions and acquisition-related charges
in operating expenses includes amortization of other purchased
intangible assets such as customer lists, covenants not to
compete and trade names. Acquisition activities are managed on a
corporate-wide basis and segment managers are not held
accountable for the acquisition-related costs impacting their
business units operating income (loss). We exclude these
amounts from our measures of segment performance and from our
budget and planning process. We exclude these items from our
non-GAAP financial measures for these reasons, the other reasons
stated above and because we believe that excluding these items
facilitates comparisons to the results of other companies in our
industry, which have their own unique acquisition histories.
|
|
|
|
Gains and losses on disposals of businesses and
assets. We exclude these amounts from our
non-GAAP financial measures for the reasons stated above and
because they are unrelated to our ongoing business operating
results.
|
|
|
|
Gains and losses on marketable equity securities and other
investments. We exclude these amounts from our
non-GAAP financial measures for the reasons stated above and
because they are unrelated to our ongoing business operating
results.
|
A-1
|
|
|
|
|
Income tax effects of excluded items. Our
non-GAAP financial measures exclude the income tax effects of
the adjustments described above that relate to the current
period as well as adjustments for similar items that relate to
prior periods. We exclude the impact of these tax items for the
reasons stated above and because management believes that they
are not indicative of our ongoing business operations.
|
|
|
|
Operating results and gains and losses on the sale of
discontinued operations. From time to time, we
sell or otherwise dispose of selected operations as we adjust
our portfolio of businesses to meet our strategic goals. In
accordance with GAAP, we segregate the operating results of
discontinued operations as well as gains and losses on the sale
of these discontinued operations from continuing operations on
our GAAP statements of operations but continue to include them
in GAAP net income or loss and net income or loss per share. We
exclude these amounts from our non-GAAP financial measures for
the reasons stated above and because they are unrelated to our
ongoing business operations.
|
The following describes each non-GAAP financial measure, the
items excluded from the most directly comparable GAAP measure in
arriving at each non-GAAP financial measure, and the reasons
management uses each measure and excludes the specified amounts
in arriving at each non-GAAP financial measure.
(A) Operating income (loss). We exclude share-based
compensation expenses, amortization of purchased intangible
assets and acquisition-related charges from our GAAP operating
income (loss) from continuing operations in arriving at our
non-GAAP operating income (loss) primarily because we do not
consider them part of ongoing operating results when assessing
the performance of the organization, our operating segments and
senior management or when undertaking our budget and planning
process. We believe that the exclusion of these expenses from
our non-GAAP financial measures also facilitates the comparison
of results for current periods and guidance for future periods
with results for prior periods. In addition, we exclude
amortization of purchased intangible assets and
acquisition-related charges from non-GAAP operating income
(loss) because we believe that excluding these items facilitates
comparisons to the results of other companies in our industry,
which have their own unique acquisition histories.
(B) Net income (loss) and net income (loss) per share (or
earnings per share). We exclude share-based compensation
expenses, amortization of purchased intangible assets,
acquisition-related charges, net gains on marketable equity
securities and other investments, gains and losses on disposals
of businesses, certain tax items as described above, and amounts
related to discontinued operations from our GAAP net income
(loss) and net income (loss) per share in arriving at our
non-GAAP net income (loss) and net income (loss) per share. We
exclude all of these items from our non-GAAP net income (loss)
and net income (loss) per share primarily because we do not
consider them part of ongoing operating results when assessing
the performance of the organization, our operating segments and
senior management or when undertaking our budget and planning
process. We believe that the exclusion of these items from our
non-GAAP financial measures also facilitates the comparison of
results for current periods and guidance for future periods with
results for prior periods.
In addition, we exclude amortization of purchased intangible
assets and acquisition-related charges from our non-GAAP net
income (loss) and net income (loss) per share because we believe
that excluding these items facilitates comparisons to the
results of other companies in our industry, which have their own
unique acquisition histories. We exclude gains on marketable
equity securities and other investments, net from our non-GAAP
net income (loss) and net income (loss) per share because they
are unrelated to our ongoing business operating results. Our
non-GAAP financial measures exclude the income tax effects of
the adjustments described above that relate to the current
period as well as adjustments for similar items that relate to
prior periods. We exclude the impact of these tax items because
management believes that they are not indicative of our ongoing
business operations. The effective tax rates used to calculate
non-GAAP net income (loss) and net income (loss) per share were
as follows: 33% for fiscal 2002 and 2003; 34% for fiscal 2004;
35% for fiscal 2005; 37% for fiscal 2006; and 36% for fiscal
2007. Finally, we exclude amounts related to discontinued
operations from our non-GAAP net income (loss) and net income
(loss) per share because they are unrelated to our ongoing
business operations.
We refer to these non-GAAP financial measures in assessing the
performance of Intuits ongoing operations and for planning
and forecasting in future periods. These non-GAAP financial
measures also facilitate our internal comparisons to
Intuits historical operating results. We have historically
reported similar non-GAAP financial measures and believe that
the inclusion of comparative numbers provides consistency in our
financial reporting. We compute non-GAAP financial measures
using the same consistent method from quarter to quarter and
year to year.
A-2
TABLE
1
INTUIT
INC.
RECONCILIATION
OF NON-GAAP FINANCIAL MEASURES
TO MOST
DIRECTLY COMPARABLE GAAP FINANCIAL MEASURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Twelve Months Ended July 31,
|
|
|
|
2007
|
|
|
2006
|
|
|
2005
|
|
|
2004
|
|
|
2003
|
|
|
2002
|
|
|
|
(In thousands, except per share amounts)
|
|
|
|
(Unaudited)
|
|
|
GAAP operating income from continuing operations
|
|
$
|
637,570
|
|
|
$
|
565,594
|
|
|
$
|
528,701
|
|
|
$
|
421,164
|
|
|
$
|
343,317
|
|
|
$
|
50,702
|
|
Amortization of purchased intangible assets
|
|
|
30,926
|
|
|
|
8,785
|
|
|
|
9,135
|
|
|
|
9,069
|
|
|
|
10,241
|
|
|
|
12,378
|
|
Acquisition-related charges
|
|
|
19,964
|
|
|
|
9,478
|
|
|
|
12,686
|
|
|
|
19,576
|
|
|
|
28,853
|
|
|
|
181,289
|
|
Charge for purchased research and development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,070
|
|
|
|
2,151
|
|
Share-based compensation expense
|
|
|
76,313
|
|
|
|
70,340
|
|
|
|
5,489
|
|
|
|
6,232
|
|
|
|
2,714
|
|
|
|
2,534
|
|
Loss on impairment of long-lived asset and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP operating income
|
|
$
|
764,773
|
|
|
$
|
654,197
|
|
|
$
|
556,011
|
|
|
$
|
456,041
|
|
|
$
|
386,195
|
|
|
$
|
276,054
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
440,003
|
|
|
$
|
416,963
|
|
|
$
|
381,627
|
|
|
$
|
317,030
|
|
|
$
|
343,034
|
|
|
$
|
140,160
|
|
Amortization of purchased intangible assets
|
|
|
30,926
|
|
|
|
8,785
|
|
|
|
9,135
|
|
|
|
9,069
|
|
|
|
10,241
|
|
|
|
12,378
|
|
Acquisition-related charges
|
|
|
19,964
|
|
|
|
9,478
|
|
|
|
12,686
|
|
|
|
19,576
|
|
|
|
28,853
|
|
|
|
181,289
|
|
Charge for purchased research and development
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,070
|
|
|
|
2,151
|
|
Share-based compensation expense
|
|
|
76,313
|
|
|
|
70,340
|
|
|
|
5,489
|
|
|
|
6,232
|
|
|
|
2,714
|
|
|
|
2,534
|
|
Loss on impairment of long-lived asset and other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
27,000
|
|
Pre-tax (gain) loss on disposal of businesses
|
|
|
(31,676
|
)
|
|
|
(2,364
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,308
|
)
|
(Gains) losses on marketable equity securities
|
|
|
(1,568
|
)
|
|
|
(7,629
|
)
|
|
|
(5,225
|
)
|
|
|
(1,729
|
)
|
|
|
(10,912
|
)
|
|
|
15,535
|
|
Income taxes related to non-GAAP items
|
|
|
(34,512
|
)
|
|
|
(19,047
|
)
|
|
|
(7,730
|
)
|
|
|
(11,270
|
)
|
|
|
(10,549
|
)
|
|
|
(76,751
|
)
|
Discrete GAAP tax items and other
|
|
|
5,537
|
|
|
|
(3,458
|
)
|
|
|
(13,298
|
)
|
|
|
(25,146
|
)
|
|
|
59
|
|
|
|
(6,335
|
)
|
Discontinued operations
|
|
|
3,465
|
|
|
|
(36,000
|
)
|
|
|
(3,884
|
)
|
|
|
7,237
|
|
|
|
(80,233
|
)
|
|
|
(86,421
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income
|
|
$
|
508,452
|
|
|
$
|
437,068
|
|
|
$
|
378,800
|
|
|
$
|
320,999
|
|
|
$
|
284,277
|
|
|
$
|
203,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP diluted net income per share
|
|
$
|
1.24
|
|
|
$
|
1.16
|
|
|
$
|
1.01
|
|
|
$
|
0.79
|
|
|
$
|
0.81
|
|
|
$
|
0.32
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP diluted net income per share
|
|
$
|
1.43
|
|
|
$
|
1.21
|
|
|
$
|
1.01
|
|
|
$
|
0.80
|
|
|
$
|
0.67
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares used in diluted per share amounts
|
|
|
355,815
|
|
|
|
360,471
|
|
|
|
376,796
|
|
|
|
400,162
|
|
|
|
421,910
|
|
|
|
435,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See About Non-GAAP Financial Measures
immediately preceding Table 1 for more information on these
non-GAAP financial measures, the items excluded from the most
directly comparable GAAP measures in arriving at non-GAAP
financial measures, and the reasons management uses each measure
and excludes the specified amounts in arriving at each non-GAAP
financial measure.
A-3
INTUIT
INC.
SENIOR EXECUTIVE INCENTIVE PLAN
As Adopted by the Compensation Committee of the Board on
October 23, 2007
And Approved by Stockholders on December , 2007
The Intuit Inc. Senior Executive Incentive Plan is a component
of Intuits overall strategy to pay its employees for
performance. The purposes of this Plan are to: (A) motivate
senior executives by tying their compensation to performance;
(B) reward exceptional performance that supports overall
Intuit objectives; and (C) attract and retain top
performing employees.
A. Award means any cash incentive
payment made under the Plan.
B. Code means the Internal Revenue Code
of 1986, as amended.
C. Committee means the Compensation
Committee of Intuits Board of Directors, or such other
committee designated by that Board of Directors, which is
authorized to administer the Plan under Section 3 hereof.
The Committee shall be comprised solely of directors who are
outside directors under Code Section 162(m).
D. Intuit means Intuit Inc. and any
corporation or other business entity of which Intuit
(i) directly or indirectly has an ownership interest of 50%
or more, or (ii) has a right to elect or appoint 50% or
more of the board of directors or other governing body.
E. Senior Executive means an Intuit
employee who holds a position with the title of Senior Vice
President or above.
F. Participant means any Senior
Executive to whom an Award is granted under the Plan.
G. Plan means this Plan, which shall be
known as the Intuit Senior Executive Incentive Plan.
A. The Plan shall be administered by the Committee. The
Committee shall have the authority to:
(i) interpret and determine all questions of policy and
expediency pertaining to the Plan;
(ii) adopt such rules, regulations, agreements and
instruments as it deems necessary for its proper administration;
(iii) select Senior Executives to receive Awards;
(iv) determine the terms of Awards;
(v) determine amounts subject to Awards (within the limits
prescribed in the Plan);
(vi) determine whether Awards will be granted in
replacement of or as alternatives to any other incentive or
compensation plan of Intuit or an acquired business unit;
(vii) grant waivers of Plan or Award conditions (but with
respect to Awards intended to qualify under Code
Section 162(m), only as permitted under that Section);
(viii) accelerate the payment of Awards (but with respect
to Awards intended to qualify under Code Section 162(m),
only as permitted under that Section);
B-1
(ix) correct any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Award or any Award notice;
(x) take any and all other actions it deems necessary or
advisable for the proper administration of the Plan;
(xi) adopt such Plan procedures, regulations, subplans and
the like as it deems are necessary to enable Senior Executives
to receive Awards; and
(xii) amend the Plan at any time and from time to time,
provided however that no amendment to the Plan shall be
effective unless approved by Intuits stockholders, to the
extent such stockholder approval is required under Code
Section 162(m) with respect to Awards which are intended to
qualify under that Section.
B. The Committee may delegate its authority to grant and
administer Awards to a separate committee; however, only the
Committee may grant and administer Awards which are intended to
qualify as performance-based compensation under Code
Section 162(m).
Only Senior Executives designated by the Committee as eligible
may become Participants in the Plan.
A. The Committee shall establish performance goals
applicable to a particular fiscal year (or performance period)
prior to its start, provided, however, that such goals may be
established after the start of the fiscal year (or performance
period) but while the outcome of the performance goal is
substantially uncertain if such a method of establishing
performance goals is permitted under proposed or final
regulations issued under Code Section 162(m).
B. Each performance goal applicable to a fiscal year (or
performance period) shall be one or more of the following
performance criteria, either individually, alternatively or in
any combination, applied to either Intuit as a whole or to a
business unit or subsidiary, either individually, alternatively
or in any combination, and measured on an absolute basis or
relative to a pre-established target, to previous years
results or to a designated comparison group, in each case as
specified by the Committee::
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Net income
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Stockholder return
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Earnings per share
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Revenue
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Return on investment
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Revenue growth
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Operating income
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Market share
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Strategic positioning
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Return on net assets programs
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Return on equity
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Cash flow
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New product releases
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Employee productivity and satisfaction metrics
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C. The Committee shall determine the target level of
performance that must be achieved with respect to each criterion
that is identified in a performance goal in order for a
performance goal to be treated as attained.
B-2
D. The Committee shall base performance goals on one or
more of the foregoing business criteria. In the event
performance goals are based on more than one business criterion,
the Committee may determine to make Awards upon attainment of
the performance goal relating to any one or more of such
criteria, provided the performance goals, when established, are
stated as alternatives to one another at the time the
performance goal is established.
E. As soon as reasonably practicable following the
conclusion of each fiscal year (or performance period), the
Committee shall certify, in writing, if and the extent to which
the performance goal or goals have been satisfied, to the extent
required by Code Section 162(m).
A. Awards may be made on the basis of Intuit
and/or
business unit performance goals and formulas determined by the
Committee. During any Intuit fiscal year, no Participant shall
receive an Award of more $5,000,000.
B. The Committee, in its discretion, may reduce or
eliminate a Participants Award at any time before it is
paid, whether or not calculated on the basis of pre-established
performance goals or formulas.
C. The payment of an Award requires that the Participant be
an active employee and on Intuits payroll on the day the
Award is paid to receive any portion of the Award. The Committee
may make exceptions to this requirement in the case of
retirement, death or disability, or in the case of a corporate
change in control as determined by the Committee in its sole
discretion.
D. Intuit shall withhold all applicable federal, state,
local and foreign taxes required by law to be paid or withheld
relating to the receipt or payment of any Award.
A. The Plan shall become effective as of October 23,
2007, contingent upon stockholder approval of the Plan.
B. Any rights of a Participant under the Plan shall not be
assignable by such Participant, by operation of law or
otherwise, except by will or the laws of descent and
distribution. No Participant may create a lien on any funds or
rights to which he or she may have an interest under the Plan,
or which is held by Intuit for the account of the Participant
under the Plan.
C. Participation in the Plan shall not give any Senior
Executive any right to remain in Intuits employ. Further,
the adoption of this Plan shall not be deemed to give any Senior
Executive or other individual the right to be selected as a
Participant or to be granted an Award.
D. To the extent any person acquires a right to receive
payments from Intuit under this Plan, such rights shall be no
greater than the rights of an unsecured creditor of
Intuits.
E. The Plan shall be governed by and construed in
accordance with the laws of the State of California.
F. The Board may amend or terminate the Plan (i) at
any time and for any reason subject to stockholder approval and
(ii) at any time and for any reason if and to the extent
the Plans qualification under Code Section 162(m)
would not be adversely affected.
B-3
INTUIT INC.
2005 EQUITY INCENTIVE PLAN
(As Amended on October 23, 2007 and Approved by the Shareholders on December , 2007)
1. PURPOSE. The purpose of the Plan is to provide incentives to attract, retain and motivate
eligible persons whose present and potential contributions are important to the success of the
Company, its Parent or Subsidiaries by offering them an opportunity to participate in the Companys
future performance through awards of Options, Restricted Stock, Stock Bonuses, Stock Appreciation
Rights (SARs) and Restricted Stock Units. Capitalized terms not defined in the text are defined in
Section 26.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 21, 46,000,000 Shares are
available for grant and issuance under the Plan. Shares that are subject to: (a) issuance upon
exercise of an Option or SAR granted under this Plan but cease to be subject to the Option or SAR
for any reason other than exercise of the Option; (b) an Award granted under this Plan but are
forfeited or are repurchased by the Company at the original issue price; or (c) an Award granted
under this Plan that otherwise terminates without Shares being issued, will return to the pool of
Shares available for grant and issuance under this Plan. In any fiscal year of the Company no more
than fifty percent (50%) of the Shares subject to Awards granted in such fiscal year may have an
Exercise Price or Purchase Price per Share that is less than Fair Market Value on the applicable
date of grant. In order that ISOs may be granted under this Plan, no more than 46,000,000 shares
shall be issued as ISOs. The Company may issue Shares which are authorized but unissued or
treasury shares pursuant to the Awards granted under this Plan. At all times the Company will
reserve and keep available a sufficient number of Shares to satisfy the requirements of all
outstanding Options and SARs granted under the Plan and all other outstanding but unvested Awards
granted under the Plan.
2.2 Adjustment of Shares. If the number of outstanding Shares is changed by a stock
dividend, recapitalization, stock split, reverse stock split, subdivision, combination,
reclassification, extraordinary dividend of cash or stock or similar change in the capital
structure of the Company, without consideration, then (a) the number of Shares reserved for
issuance under the Plan and the limits that are set forth in Section 2.1; (b) the Exercise Prices
of and number of Shares subject to outstanding Options and SARs; (c) the number of Shares subject
to other outstanding Awards; (d) the 4,000,000 and 6,000,000 maximum number of shares that may be
issued to an individual in any one calendar year set forth in Section 3; and (e) the number of
Shares that are granted as Options to Non-Employee Directors as set forth in Section 10, will be
proportionately adjusted, subject to any required action by the Board or the stockholders of the
Company and compliance with applicable securities laws; provided that fractions of a Share will not
be issued but will either be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded up to the nearest whole Share, as determined by the
Committee; and provided further that the Exercise Price of any Option may not be decreased to below
the par value of the Shares.
3. ELIGIBILITY. ISOs may be granted only to employees (including officers and directors who
are also employees) of the Company or of a Parent or Subsidiary. All other Awards may be granted
to employees (including officers and directors who are also employees), non-employee directors and
consultants of the Company or any Parent or Subsidiary; provided that such consultants, contractors
and advisors render bona fide services not in connection with the offer and sale of securities in a
capital-raising transaction. The Committee (or its designee under 4.1(c)) will from time to time
determine and designate among the eligible persons who will be granted one or more Awards under the
Plan. A person may be granted more than one Award under the Plan. However, no person will be
eligible to receive more than 4,000,000 Shares issuable under Awards granted in any calendar year,
other than new employees of the Company or of a Parent or Subsidiary (including new employees who
are also officers and directors of the Company or any Parent or Subsidiary), who are eligible to
receive up to a maximum of 6,000,000 Shares issuable under Awards granted in the calendar year in
which they commence their employment.
4. ADMINISTRATION.
4.1 Committee Authority. The Plan shall be administered by the Committee or by the
Board acting as the Committee. Except for automatic grants to Non-Employee Directors pursuant to
Section 10 hereof, and subject to the general purposes, terms and conditions of the Plan, the
Committee will have full power to implement and carry out the Plan. Without limiting the previous
sentence, the Committee will have the authority to:
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construe and interpret the Plan, any Award Agreement and any other agreement or
document executed pursuant to the Plan; |
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prescribe, amend and rescind rules and regulations relating to the Plan or any
Award, including determining the subplans, forms and agreements used in connection with
the Plan; provided that the Committee may delegate to the President, the Chief
Financial Officer or the officer in charge of Human Resources, in consultation with the
General Counsel, the authority to approve revisions to the forms and agreements used in
connection with the Plan that are designed to facilitate Plan administration both
domestically and abroad, and that are not inconsistent with the Plan or with any
resolutions of the Committee relating to the Plan; |
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select persons to receive Awards; provided that the Committee may delegate to
one or more Executive Officers (who would also be considered officers under Delaware
law) the authority to grant an Award under the Plan to Participants who are not
Insiders; |
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determine the terms of Awards; |
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determine the number of Shares or other consideration subject to Awards; |
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determine whether Awards will be granted singly, in combination, or in tandem
with, in replacement of, or as alternatives to, other Awards under the Plan or any
other incentive or compensation plan of the Company or any Parent or Subsidiary; |
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grant waivers of Plan or Award conditions; |
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determine the vesting, exercisability, transferability, and payment of Awards; |
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correct any defect, supply any omission, or reconcile any inconsistency in the Plan, any
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determine whether an Award has been earned; |
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amend the Plan; or |
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make all other determinations necessary or advisable for the administration of
the Plan. |
4.2 Committee Interpretation and Discretion. Except for automatic grants to
Non-Employee Directors pursuant to Section 10 hereof, any determination made by the Committee with
respect to any Award shall be made in its sole discretion at the time of grant of the Award or,
unless in contravention of any express term of the Plan or Award, at any later time, and such
determination shall be final and binding on the Company and all persons having an interest in any
Award under the Plan. Any dispute regarding the interpretation of the Plan or any Award Agreement
shall be submitted by the Participant or Company to the Committee for review. The resolution of
such a dispute by the Committee shall be final and binding on the Company and Participant. The
Committee may delegate to one or more Executive Officers, the authority to review and resolve
disputes with respect to Awards held by Participants who are not Insiders, and such resolution
shall be final and binding on the Company and Participant.
Notwithstanding any provision of the Plan to the contrary, administration of the Plan shall at all
times be limited by the requirement that any administrative action or exercise of discretion shall
be void (or suitably modified when possible) if necessary to avoid the application to any
Participant of immediate taxation and/or tax penalties under Section 409A of the Code.
5. OPTIONS. The Committee may grant Options to eligible persons and will determine
(a) whether the Options will be ISOs or NQSOs; (b) the number of Shares subject to the Option,
(c) the Exercise Price of the Option, (d) the period during which the Option may be exercised, and
(e) all other terms and conditions of the Option, subject to the provisions of this Section 5 and
the Plan. Options granted to Non-Employee Directors pursuant to Section 10 hereof shall be
governed by that Section.
5.1 Form of Option Grant. Each Option granted under the Plan will be evidenced by a
Stock Option Agreement that will expressly identify the Option as an ISO or NQSO. Except as
otherwise required by the terms of Options to Non-Employee Directors as provided in the terms of
Section 10 hereof, the Stock Option Agreement will be substantially in a form and contain such
provisions (which need not be the same for each Participant) that the Committee or an officer of
the Company (pursuant to Section 4.1(b)) has from time to time approved, and will comply with and
be subject to the terms and conditions of the Plan.
5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant the Option, unless a later date is otherwise specified
by the Committee. The Stock Option Agreement, and a copy of the Plan and the current Prospectus
for the Plan (plus any additional documents required to be delivered under applicable laws), will
be delivered to the Participant within a reasonable time after the Option is granted. The Stock
Option Agreement, Plan, the Prospectus and other documents may be delivered in any manner
(including electronic distribution or posting) that meets applicable legal requirements.
5.3 Exercise Period and Expiration Date. An Option will be exercisable within the
times or upon the occurrence of events determined by the Committee and set forth in the Stock
Option Agreement governing such Option, subject to the provisions of Section 5.6, and subject to
Company policies established by the Committee (or by individuals to whom the Committee has
delegated responsibility) from time to time with respect to vesting during leaves of absences. The
Stock Option Agreement shall set forth the last date that the Option may be exercised (the
Expiration Date); provided that no Option will be exercisable after the expiration of
seven years from the date the Option is granted; and provided further that no ISO granted to a Ten
Percent Stockholder will be exercisable after the expiration of five years from the date the Option
is granted. The Committee also may provide for Options to become exercisable at one time or from
time to time, periodically or otherwise (including, without limitation, upon the attainment during
a Performance Period of performance goals based on Performance Factors), in such number of Shares
or percentage of Shares subject to the Option as the Committee determines.
5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and, subject to the limit of Section 2.1, may be less than
Fair Market Value (but not less than the par value of the Shares); provided that (i) the Exercise
Price of an ISO will not be less than the Fair Market Value of the Shares on the date of grant and
(ii) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than 110%
of the Fair Market Value of the Shares on the date of grant. Payment for the Shares purchased must
be made in accordance with Section 11 of the Plan and the Stock Option Agreement.
5.5 Procedures for Exercise. A Participant or Authorized Transferee may exercise
Options by following the procedures established by the Companys Stock Administration Department,
as communicated and made available to Participants through the stock pages on the Intuit Legal
Department intranet web site, and/or through the Companys electronic mail system.
5.6 Termination.
(a) Vesting. Any Option granted to a Participant will cease to vest on the
Participants Termination Date, if the Participant is Terminated for any reason other than total
disability (as defined in this Section 5.6(a)) or death. Any Option granted to a Participant who
is an employee who has been actively employed by the Company or any Subsidiary for one year or more
or who is a director, will vest as to 100% of the Shares subject to such Option,
if the Participant is Terminated due to total disability or death. For purposes of this Section
5.6(a), total disability shall mean: (i) (A) for so long as such definition is used for purposes
of the Companys group life insurance and accidental death and dismemberment plan or group long
term disability plan, that the Participant is unable to perform each of the material duties of any
gainful occupation for which the Participant is or becomes reasonably fitted by training, education
or experience and which total disability is in fact preventing the Participant from engaging in any
employment or occupation for wage or profit; or, (B) if such definition has changed, such other
definition of total disability as determined under the Companys group life insurance and
accidental death and dismemberment plan or group long term disability plan; and (ii) the Company
shall have received from the Participants primary physician a certification that the Participants
total disability is likely to be permanent. Any Option held by an employee who is Terminated by
the Company, or any Subsidiary or Parent within one year following the date of a Corporate
Transaction, will immediately vest as to such number of Shares as the Participant would have been
vested in twelve months after the date of Termination had the Participant remained employed for
that twelve month period.
(b) Post-Termination Exercise Period. Following a Participants Termination, the
Participants Option may be exercised to the extent vested as set forth in Section 5.6(a):
(i) no later than 90 days after the Termination Date if a Participant is Terminated for any
reason except death or Disability, unless a longer time period, not exceeding five years, is
specifically set forth in the Participants Stock Option Agreement; provided that no Option may be
exercised after the Expiration Date of the Option; or
(ii) no later than (A) twelve months after the Termination Date in the case of Termination due
to Disability or (B) eighteen months after the Termination Date in the case of Termination due to
death or if a Participant dies within three months of the Termination Date, unless a longer time
period, not exceeding five years, is specifically set forth in the Participants Stock Option
Agreement; provided that no Option may be exercised after the Expiration Date of the Option.
5.7 Limitations on Exercise. The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option; provided that the minimum number will
not prevent a Participant from exercising an Option for the full number of Shares for which it is
then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the date
of grant) of Shares with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year (under the Plan or under any other incentive stock option plan of the
Company or any Parent or Subsidiary) shall not exceed $100,000. If the Fair Market Value of Shares
on the date of grant with respect to which ISOs are exercisable for the first time by a Participant
during any calendar year exceeds $100,000, the Options for the first $100,000 worth of Shares to
become exercisable in that calendar year will be ISOs, and the Options for the Shares with a Fair
Market Value in excess of $100,000 that become exercisable in that calendar year will be NQSOs. If
the Code is amended to provide for a different limit on the Fair Market Value of Shares permitted
to be subject to ISOs, such different limit shall be automatically incorporated into the Plan and
will apply to any Options granted after the effective date of the Codes amendment.
5.9 Notice of Disqualifying Dispositions of Shares Acquired on Exercise of an ISO. If
a Participant sells or otherwise disposes of any Shares acquired pursuant to the exercise of an ISO
on or before the later of (a) the date two years after the Date of Grant, and (b) the date one year
after the exercise of the ISO (in either case, a Disqualifying Disposition), the Company
may require the Participant to immediately notify the Company in writing of such Disqualifying
Disposition.
5.10 Modification, Extension or Renewal. The Committee may modify, extend or renew
outstanding Options and authorize the grant of new Options in substitution therefor; provided that
any such action may not, without the written consent of Participant, impair any of Participants
rights under any Option previously granted; and provided, further that without stockholder
approval, the modified, extended, renewed or new Option may not have a lower Exercise Price than
the outstanding Option. Any outstanding ISO that is modified, extended, renewed or otherwise
altered shall be treated in accordance with Section 424(h) of the Code. The Committee may
reduce the Exercise Price of outstanding Options without the consent of Participants affected, by a
written notice to them; provided, however, that unless prior stockholder approval is secured, the
Exercise Price may not be reduced below that of the outstanding Option.
5.11 No Disqualification. Notwithstanding any other provision in the Plan, no term of
the Plan relating to ISOs will be interpreted, amended or altered, and no discretion or authority
granted under the Plan will be exercised, so as to disqualify the Plan under Section 422 of the
Code or, without the consent of the Participant affected, to disqualify any ISO under Section 422
of the Code.
6. RESTRICTED STOCK AWARDS.
6.1 Awards of Restricted Stock. A Restricted Stock Award is an offer by the Company
to sell to an eligible person Shares that are subject to restrictions. The Committee will
determine to whom an offer will be made, the number of Shares the person may purchase, the
Purchase Price, the restrictions under which the Shares will be subject and all other terms and
conditions of the Restricted Stock Award, subject to the following:
6.2 Restricted Stock Purchase Agreement. All purchases under a Restricted Stock Award
will be evidenced by a Restricted Stock Purchase Agreement, which will be in substantially a form
(which need not be the same for each Participant) that the Committee or an officer of the Company
(pursuant to Section 4.1(b)) has from time to time approved, and will comply with and be subject to
the terms and conditions of the Plan. A Participant accepts a Restricted Stock Award by signing
and delivering to the Company a Restricted Stock Purchase Agreement with full payment of the
Purchase Price, within thirty days from the date the Restricted Stock Purchase Agreement was
delivered to the Participant. If the Participant does not accept the Restricted Stock Award within
thirty days, then the offer of the Restricted Stock Award will terminate, unless the Committee
determines otherwise.
6.3 Purchase Price. The Purchase Price for a Restricted Stock Award will be
determined by the Committee and, subject to the limit of Section 2.1, may be less than Fair Market
Value (but not less than the par value of the Shares) on the date the Restricted Stock Award is
granted. Payment of the Purchase Price must be made in accordance with Section 11 of the Plan and
the Restricted Stock Purchase Agreement, and in accordance with any procedures established by the
Companys Stock Administration Department, as communicated and made available to Participants
through the stock pages on the Intuit Legal Department intranet web site, and/or through the
Companys electronic mail system.
6.4 Terms of Restricted Stock Awards. Restricted Stock Awards will be subject to such
restrictions as the Committee may impose. These restrictions may be based on completion of a
specified number of years of service with the Company or upon completion of the performance goals
based on Performance Factors during any Performance Period as set out in advance in the
Participants Restricted Stock Purchase Agreement. Prior to the grant of a Restricted Stock Award,
the Committee shall: (a) determine the nature, length and starting date of any Performance Period
for the Restricted Stock Award; (b) select from among the Performance Factors to be used to measure
performance goals, if any; and (c) determine the number of Shares that may be awarded to the
Participant. Prior to the payment for Shares to be purchased under any Restricted Stock Award, the
Committee shall determine the extent to which such Restricted Stock Award has been earned.
Performance Periods may overlap and a Participant may participate simultaneously with respect to
Restricted Stock Awards that are subject to different Performance Periods and having different
performance goals and other criteria.
6.5 Termination During Performance Period. If a Participant is Terminated during a
Performance Period or vesting period, for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Restricted Stock Award only to
the extent earned as of the date of Termination in accordance with the Restricted Stock Purchase
Agreement, unless the Committee will determine otherwise.
7. STOCK BONUS AWARDS.
7.1 Awards of Stock Bonuses. A Stock Bonus Award is an award to an eligible person of
Shares (which may consist of Restricted Stock or Restricted Stock Units) for services to be
rendered or for past
services already rendered to the Company or any Parent or Subsidiary. All Stock Bonus Awards shall
be made pursuant to a Stock Bonus Agreement, which shall be in substantially a form (which need not
be the same for each Participant) that the Committee or an officer of the Company (pursuant to
Section 4.1(b)) has from time to time approved, and will comply with and be subject to the terms
and conditions of the Plan. No payment will be required for Shares awarded pursuant to a Stock
Bonus Award, but the number of Shares awarded is subject to the limit of Section 2.1.
7.2 Terms of Stock Bonus Awards. The Committee will determine the number of Shares to
be awarded to the Participant under a Stock Bonus Award and any restrictions thereon. These
restrictions may be based upon completion of a specified number of years of service with the
Company or upon satisfaction of performance goals based on Performance Factors during any
Performance Period as set out in advance in the Participants Stock Bonus Agreement. If the Stock
Bonus Award is to be earned upon the satisfaction of performance goals, the Committee shall:
(a) determine the nature, length and starting date of any Performance Period for the Stock Bonus
Award; (b) select from among the Performance Factors to be used to measure performance goals; and
(c) determine the number of Shares that may be awarded to the Participant. Prior to the issuance
of any Shares or other payment to a Participant pursuant to a Stock Bonus Award, the Committee will
determine the extent to which the Stock Bonus Award has been earned. Performance Periods may
overlap and a Participant may participate simultaneously with respect to Stock Bonus Awards that
are subject to different Performance Periods and different performance goals and other criteria.
The number of Shares may be fixed or may vary in accordance with such performance goals and
criteria as may be determined by the Committee. The Committee may adjust the performance goals
applicable to a Stock Bonus Award to take into account changes in law and accounting or tax rules
and to make such adjustments as the Committee deems necessary or appropriate to reflect the impact
of extraordinary or unusual items, events or circumstances to avoid windfalls or hardships.
7.3 Form of Payment to Participant. The Committee will determine whether the earned
portion of a Stock Bonus Award will be paid to the Participant currently or on a deferred basis
with such interest or dividend equivalent, if any, as the Committee may determine. To the extent
permissible under law, the Committee may also permit a Participant to defer payment under a Stock
Bonus Award to a date or dates after the Stock Bonus Award is earned provided that the terms of the
Stock Bonus Award and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.
Payment may be made in the form of cash, whole Shares, or a combination thereof, based on the Fair
Market Value of the Shares earned under a Stock Bonus Award on the date of payment, and in either a
lump sum payment or in installments.
7.4 Termination of Participant . In the event of a Participants Termination during a
Performance Period or vesting period, for any reason, then such Participant will be entitled to
payment (whether in Shares, cash or otherwise) with respect to the Stock Bonus Award only to the
extent earned as of the date of Termination in accordance with the Stock Bonus Agreement, unless
the Committee determines otherwise.
8. STOCK APPRECIATION RIGHTS.
8.1 Awards of SARs. A Stock Appreciation Right (SAR) is an award to an
eligible person that may be settled in cash, or Shares (which may consist of Restricted Stock),
having a value equal to the value determined by multiplying the difference between the Fair Market
Value on the date of exercise over the Exercise Price and the number of Shares with respect to
which the SAR is being settled. The SAR may be granted for services to be rendered or for past
services already rendered to the Company, or any Parent or Subsidiary. All SARs shall be made
pursuant to a SAR Agreement, which shall be in substantially a form (which need not be the same for
each Participant) that the Committee or an officer of the Company (pursuant to Section 4.1(b)) has
from time to time approved, and will comply with and be subject to the terms and conditions of this
Plan.
8.2 Terms of SARs. The Committee will determine the terms of a SAR including, without
limitation: (a) the number of Shares deemed subject to the SAR; (b) the Exercise Price and the time
or times during which the SAR may be settled; (c) the consideration to be distributed on settlement
of the SAR; and (d) the effect on
each SAR of the Participants Termination. The Exercise Price of the SAR will be determined
by the Committee when the SAR is granted and, subject to the limit of Section 2.1, may be less than
Fair Market Value (but not less than the par value of the Shares.) A SAR may be awarded upon
satisfaction of such performance goals based on Performance Factors during any Performance Period
as are set out in advance in the Participants individual SAR Agreement. If the SAR is being
earned upon the satisfaction of performance goals, then the Committee will: (x) determine the
nature, length and starting date of any Performance Period for each SAR; and (y) select from among
the Performance Factors to be used to measure the performance, if any. Prior to settlement of any
SAR earned upon the satisfaction of performance goals pursuant to a SAR Agreement, the Committee
shall determine the extent to which such SAR has been earned. Performance Periods may overlap and
Participants may participate simultaneously with respect to SARs that are subject to different
performance goals and other criteria. The Exercise Price of an outstanding SAR may not be reduced
without stockholder approval.
8.3 Exercise Period and Expiration Date. A SAR will be exercisable within the times
or upon the occurrence of events determined by the Committee and set forth in the SAR Agreement
governing such SAR. The SAR Agreement shall set forth the last date that the SAR may be exercised
(the Expiration Date); provided that no SAR will be exercisable after the expiration of
seven years from the date the SAR is granted. The Committee may also provide for SARs to become
exercisable at one time or from time to time, periodically or otherwise (including, without
limitation, upon the attainment during a Performance Period of performance goals based on
Performance Factors), in such number of Shares or percentage of the Shares subject to the SAR as
the Committee determines.
8.4 Form and Timing of Settlement. The portion of a SAR being settled may be paid
currently or on a deferred basis with such interest or dividend equivalent, if any, as the
Committee determines. Payment may be made in the form of cash or whole Shares or a combination
thereof, either in a lump sum payment or in installments, as the Committee determines, provided
that the terms of the SAR and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.
9. RESTRICTED STOCK UNITS
9.1 Awards of Restricted Stock Units. A Restricted Stock Unit (RSU) is an
award to an eligible person covering a number of Shares that may be settled in cash, or by issuance
of those Shares (which may consist of Restricted Stock) for services to be rendered or for past
services already rendered to the Company or any Parent or Subsidiary. The Committee may authorize
the issuance of RSUs to certain eligible persons who elect to defer cash compensation. All RSUs
shall be made pursuant to a RSU Agreement, which shall be in substantially a form (which need not
be the same for each Participant) that the Committee or an officer of the Company (pursuant to
Section 4.1(b)) has from time to time approved, and will comply with and be subject to the terms
and conditions of the Plan (including the limit set forth in Section 2.1).
9.2 Terms of RSUs. The Committee will determine the terms of a RSU including, without
limitation: (a) the number of Shares deemed subject to the RSU; (b) the time or times during which
the RSU may be exercised; (c) the consideration to be distributed on settlement, and the effect on
each RSU of the Participants Termination. A RSU may be awarded upon satisfaction of such
performance goals based on Performance Factors during any Performance Period as are set out in
advance in the Participants individual RSU Agreement. If the RSU is being earned upon
satisfaction of performance goals, then the Committee will: (x) determine the nature, length and
starting date of any Performance Period for the RSU; (y) select from among the Performance Factors
to be used to measure the performance, if any; and (z) determine the number of Shares deemed
subject to the RSU. Prior to settlement of any RSU earned upon the satisfaction of performance
goals pursuant to a RSU Agreement, the Committee shall determine the extent to which such SAR has
been earned. Performance Periods may overlap and participants may participate simultaneously with
respect to RSUs that are subject to different Performance Periods and different performance goals
and other criteria. The number of Shares may be fixed or may vary in accordance with such
performance goals and criteria as may be determined by the Committee. The Committee may adjust the
performance goals applicable to the RSUs to take into account changes in law and accounting and to
make such
adjustments as the Committee deems necessary or appropriate to reflect the impact of extraordinary
or unusual items, events or circumstances to avoid windfalls or hardships.
9.3 Form and Timing of Settlement. The portion of a RSU being settled may be paid
currently or on a deferred basis with such interest or dividend equivalent, if any, as the
Committee determines. To the extent permissible under law, the Committee may also permit a
Participant to defer payment under a RSU to a date or dates after the RSU is earned provided that
the terms of the RSU and any deferral satisfy the requirements of Section 409A of the Code and
provided further that payout shall not be deferred beyond March 15 of the year following the year
of vesting unless a deferral election in compliance with Section 409A of the Code has been made.
Payment may be made in the form of cash or whole Shares or a combination thereof, either in a lump
sum payment or in installments, all as the Committee determines.
10. AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS.1
10.1 Eligibility. Non-Employee Directors are eligible for options granted pursuant to
this Section 10.
10.2 Initial Grant. Each Non-Employee Director who first becomes a member of the
Board on or after July 26, 2006, will automatically be granted an option for 67,500 Shares on the
date such Non-Employee Director first becomes a member of the Board. Each Option granted pursuant
to this Section 10.2 shall be called an Initial Grant.
10.3 Succeeding Grant. On each anniversary occurring on or after July 26, 2006, of an
Initial Grant under this Plan (or under the Companys 1996 Directors Stock Option Plan) each
Non-Employee Director who has served continuously as a member of the Board during that period will
automatically be granted an Option for 22,500 Shares. Each Option granted pursuant to this Section
10.3 shall be called a Succeeding Grant.
10.4 Audit Committee Grants. Each Non-Employee Director who is appointed Chairperson
of the Audit Committee, if any, on or after July 26, 2006, will automatically be granted an Option
for 10,000 Shares on the day he or she is appointed (the Audit Committee Chairperson
Grant). On each anniversary of a Non-Employee Directors first Audit Committee Chairperson
Grant on which the Non-Employee Director continues to be the Chairperson of the Audit Committee,
the Non-Employee Director will automatically be granted an Option for 10,000 Shares (also an
Audit Committee Chairperson Grant). Each Non-Employee Director who is appointed a new
non-Chairperson member of the Audit Committee on or after July 26, 2006, will automatically be
granted an Option for 7,500 Shares on the day he or she is appointed. The types of option grant
referenced in the preceding two sentences or granted under this Section 10.4 prior to July 26,
2006, are each hereinafter referred to as an Audit Committee Grant. If on each
subsequent anniversary occurring on or after July 26, 2006, of a Non-Employee Directors first
Audit Committee Grant, the Non-Employee Director is a non-Chairperson member of the Audit Committee
and if the Non-Employee Director has been in continuous service on the Audit Committee since such
Audit Committee Grant, then the Non-Employee Director will automatically be granted an Option for
7,500 Shares (each such Option a Succeeding Audit Committee Grant).
10.5 Compensation and Organizational Development Committee Grants. Each Non-Employee
Director who is appointed Chairperson of the Compensation and Organizational Development Committee,
if any, on or after July 26, 2006, will automatically be granted an Option for 10,000 Shares on the
day he or she is appointed (the Compensation Committee Chairperson Grant). On each
anniversary of a Non-Employee Directors first Compensation Committee Chairperson Grant on which
the Non-Employee Director continues to be the Chairperson of the Compensation and Organizational
Development Committee, the Non-Employee Director will automatically be granted an Option for 10,000
Shares (also a Compensation Committee Chairperson Grant). Each Non-Employee Director who
is appointed a new non-Chairperson member of the Compensation and Organizational Development
Committee on or after July 26, 2006, will automatically be granted
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1 |
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The automatic grants referenced in this Section 10
reflect the amendment of the Plan adopted by the Board on July 26, 2006.
Previously Initial Grants were for 45,000 shares, Succeeding Grants were for
15,000 shares and grants for service on a qualifying committee were for 10,000
shares. |
an Option for 7,500 Shares on the day he or she is appointed. The types of option grant referenced
in the preceding two sentences or granted under this Section 10.5 prior to July 26, 2006, are each
hereinafter referred to as a Compensation Committee Grant. If on each subsequent
anniversary occurring on or after July 26, 2006, of a Non-Employee Directors first Compensation
Committee Grant the Non-Employee Director is a non-Chairperson member of the Compensation and
Organizational Development Committee and if the Non-Employee Director has been in continuous
service on the Compensation and Organizational Development Committee since such Compensation
Committee Grant, then the Non-Employee Director will automatically be granted an Option for 7,500
Shares (each such Option a Succeeding Compensation Committee Grant).
10.6 Nominating & Governance Committee Grants. Each Non-Employee Director who is
appointed Chairperson of the Nominating & Governance Committee, if any, on or after July 26, 2006,
will automatically be granted an Option for 10,000 Shares on the day he or she is appointed (the
Nominating & Governance Committee Chairperson Grant). On each anniversary of a
Non-Employee Directors first Nominating & Governance Committee Chairperson Grant on which the
Non-Employee Director continues to be the Chairperson of the Nominating & Governance Committee, the
Non-Employee Director will automatically be granted an Option for 10,000 Shares (also a
Nominating & Governance Committee Chairperson Grant). Each Non-Employee Director who is
appointed a new non-Chairperson member of the Nominating & Governance Committee on or after July
26, 2006, will automatically be granted an Option for 7,500 Shares on the day he or she is
appointed. The types of option grant referenced in the preceding two sentences or granted under
this Section 10.6 prior to July 26, 2006, are each hereinafter referred to as a Nominating &
Governance Committee Grant. If on each anniversary occurring on or after July 26, 2006, of a
Non-Employee Directors first Nominating & Governance Committee Grant the Non-Employee Director is
a non-Chairperson member of the Nominating & Governance Committee and if the Non-Employee Director
has been in continuous service on the Nominating & Governance Committee since such Nominating &
Governance Committee Grant, the Non-Employee Director will automatically be granted an Option for
7,500 Shares (each such Option a Succeeding Nominating & Governance Committee Grant).
10.7 Vesting and Exercisability
(a) Initial Grants shall become exercisable as they vest as to 25% of the Shares upon the
first anniversary of the date such Option is granted and an additional 2.0833% of the shares each
month thereafter and become fully vested on the fourth anniversary of the date of grant, so long as
the Non-Employee Director continuously remains a director or a consultant of the Company.
(b) Succeeding Grants shall become exercisable as they vest as to 50% of the Shares upon the
first anniversary of the date such Option is granted and an additional 4.1666% of the Shares each
month thereafter and become fully vested on the second anniversary of the date of grant, so long as
the Non-Employee Director continuously remains a director or a consultant of the Company.
(c) Each Audit Committee Grant, Succeeding Audit Committee Grant, Compensation Committee
Grant, Succeeding Compensation Committee Grant, Nominating & Governance Committee Grant and
Succeeding Nominating & Governance Committee Grant shall become exercisable as they vest as to
8.333% of the Shares each month following the date of grant and become fully vested on the first
anniversary of the date of grant, so long as the Non-Employee Director continuously remains a
director or a consultant of the Company.
(d) Any Option granted to a Non-Employee Director will vest as to 100% of the Shares subject
to such Option, if the Non-Employee Director ceases to be a member of the Board or a consultant of
the Company due to total disability or death. For purposes of this Section 10.7(d), total
disability shall mean: (1) (i) for so long as such definition is used for purposes of the
Companys group life insurance and accidental death and dismemberment plan or group long term
disability plan, that the Non-Employee Director is unable to perform each of the material duties of
any gainful occupation for which the Non-Employee Director is or becomes reasonably fitted by
training, education or experience and which total disability is in fact preventing the Non-Employee
Director from engaging in any employment or occupation for wage or profit or (ii) if such
definition has changed, such other definition of total disability as determined under the
Companys group life insurance and accidental death and dismemberment plan or group long term
disability plan; and (2) the Company shall have
received from the Non-Employee Directors primary physician a certification that the Non-Employee
Directors total disability is likely to be permanent.
(e) In the event of a Corporate Transaction, the vesting of all Options granted to
Non-Employee Directors pursuant to this Section 10 will accelerate and such Options will become
exercisable in full prior to the consummation of such event at such time and on such conditions as
the Committee determines, and if such Options are not exercised on or prior to the consummation of
the corporate transaction, they shall terminate.
10.8 Form of Option Grant. Each Option granted under this Section 10 shall be a NQSO
and shall be evidenced by a Non-Employee Director Stock Option Grant Agreement in such form as the
Committee shall from time to time approve and which shall comply with and be subject to the terms
and conditions of this Plan.
10.9 Exercise Price. The Exercise Price of each Option granted under this Section 10
shall be the Fair Market Value of the Share on the date the Option is granted. The Exercise Price
of an outstanding Option may not be reduced without stockholder approval.
10.10 Termination of Option. Except as provided in Section 10.7(e) or this Section
10.10, each Option granted under this Section 10 shall expire seven (7) years after its date of
grant. The date on which the Non-Employee Director ceases to be a member of the Board or a
consultant of the Company shall be referred to as the Non-Employee Director Termination
Date for purposes of this Section 10.10. An Option may be exercised after the Non-Employee
Director Termination Date only as set forth below:
(a) Termination Generally. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company for any reason except death or Disability, then each Option, to
the extent then vested pursuant to Section 10.7 above, then held by such Non-Employee Director may
be exercised by the Non-Employee Director within seven months after the Non-Employee Director
Termination Date, but in no event later than the Expiration Date.
(b) Death or Disability. If the Non-Employee Director ceases to be a member of the
Board or consultant of the Company because of his or her death or Disability, then each Option, to
the extent then vested pursuant to Section 10.7 above, then held by such Non-Employee Director may
be exercised by the Non-Employee Director or his or her legal representative within twelve months
after the Non-Employee Director Termination Date, but in no event later than the Expiration Date.
11. PAYMENT FOR SHARE PURCHASES.
11.1 Payment. Payment for Shares purchased pursuant to the Plan may be made by any of
the following methods (or any combination of such methods) that are described in the applicable
Award Agreement and that are permitted by law:
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(a) |
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in cash (by check); |
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(b) |
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in the case of exercise by the Participant, Participants guardian or legal
representative or the authorized legal representative of Participants heirs or
legatees after Participants death, by cancellation of indebtedness of the Company to
the Participant; |
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(c) |
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by surrender of shares of the Companys Common Stock; |
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(d) |
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in the case of exercise by the Participant, Participants guardian or legal
representative or the authorized legal representative of Participants heirs or
legatees after Participants death, by waiver of compensation due or accrued to
Participant for services rendered; |
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(e) |
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by tender of property; or |
(f) with respect only to purchases upon exercise of an Option, and provided that a
public market for the Companys stock exists:
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(1) |
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through a same day sale commitment from the Participant or
Authorized Transferee and an NASD Dealer meeting the requirements of the
Companys same day sale procedures and in accordance with law; or |
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(2) |
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through a margin commitment from Participant or Authorized
Transferee and an NASD Dealer meeting the requirements of the Companys
margin procedures and in accordance with law. |
11.2 Issuance of Shares. Upon payment of the applicable Purchase Price or Exercise
Price (or a commitment for payment from the NASD Dealer designated by the Participant or Authorized
Transferee in the case of an exercise by means of a same-day sale or margin commitment), and
compliance with other conditions and procedures established by the Company for the purchase of
shares, the Company shall issue the Shares registered in the name of Participant or Authorized
Transferee (or in the name of the NASD Dealer designated by the Participant or Authorized
Transferee in the case of an exercise by means of a same-day sale or margin commitment) and
shall deliver certificates representing the Shares (in physical or electronic form, as
appropriate). The Shares may be subject to legends or other restrictions as described in Section
15 of the Plan.
12. WITHHOLDING TAXES.
12.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under the Plan, the Company may require the Participant to remit to the Company an
amount sufficient to satisfy federal, state and local withholding tax requirements prior to the
delivery of any certificate(s) for the Shares. If a payment in satisfaction of an Award is to be
made in cash, the payment will be net of an amount sufficient to satisfy federal, state, and local
withholding tax requirements.
12.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is subject to tax
withholding and the Participant is obligated to pay the Company the amount required to be withheld,
the Committee may, in its sole discretion, allow the Participant to satisfy the minimum withholding
tax obligation by electing to have the Company withhold from the Shares to be issued that number of
whole Shares having a Fair Market Value equal to the minimum amount required to be withheld,
determined on the date that the amount of tax to be withheld is to be determined. All elections by
a Participant to have Shares withheld for this purpose shall be made in accordance with the
requirements established by the Committee and be in writing in a form acceptable to the Committee.
13. PRIVILEGES OF STOCK OWNERSHIP. No Participant or Authorized Transferee will have any
rights as a stockholder of the Company with respect to any Shares until the Shares are issued to
the Participant or Authorized Transferee. After Shares are issued to the Participant or Authorized
Transferee, the Participant or Authorized Transferee will be a stockholder and have all the rights
of a stockholder with respect to the Shares including the right to vote and receive all dividends
or other distributions made or paid with respect to such Shares; provided, that if the Shares are
Restricted Stock, any new, additional or different securities the Participant or Authorized
Transferee may become entitled to receive with respect to the Shares by virtue of a stock dividend,
stock split or any other change in the corporate or capital structure of the Company will be
subject to the same restrictions as the Restricted Stock; provided further, that the Participant or
Authorized Transferee will have no right to retain such dividends or distributions with respect to
Shares that are repurchased at the Participants original Exercise Price or Purchase Price pursuant
to Section 15.
14. TRANSFERABILITY. No Award and no interest therein, shall be sold, pledged, assigned,
hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent
and distribution, and no Award may be made subject to execution, attachment or similar process;
provided, however that with the consent of the Committee a Participant may transfer a NQSO to an
Authorized Transferee. Transfers by the Participant for consideration are prohibited. Without
such permission by the Committee, a NQSO shall like all other Awards under the Plan be exercisable
(a) during a Participants lifetime only by the Participant or the Participants
guardian or legal representative; and (b) after Participants death, by the legal representative of
the Participants heirs or legatees.
15. RESTRICTIONS ON SHARES. At the discretion of the Committee, the Company may reserve to
itself and/or its assignee(s) in the Award Agreement a right to repurchase all or a portion of a
Participants Shares that are not Vested (as defined in the Award Agreement), following the
Participants Termination, at any time within ninety days after the later of (a) the Participants
Termination Date or (b) the date the Participant purchases Shares under the Plan, for cash or
cancellation of purchase money indebtedness with respect to Shares, at the Participants original
Exercise Price or Purchase Price; provided that upon assignment of the right to repurchase, the
assignee must pay the Company cash equal to the excess of the Fair Market Value of the Shares over
the original Purchase Price.
16. CERTIFICATES. All certificates for Shares or other securities delivered under the Plan
(whether in physical or electronic form, as appropriate) will be subject to stock transfer orders,
legends and other restrictions that the Committee deems necessary or advisable, including without
limitation restrictions under any applicable federal, state or foreign securities law, or any
rules, regulations and other requirements of the SEC or any stock exchange or automated quotation
system on which the Shares may be listed.
17. ESCROW. To enforce any restrictions on a Participants Shares, the Committee may require
the Participant to deposit all certificates representing Shares, together with stock powers or
other transfer instruments approved by the Committee, appropriately endorsed in blank, with the
Company or an agent designated by the Company, to hold in escrow until such restrictions have
lapsed or terminated, and the Committee may cause a legend or legends referencing such restrictions
to be placed on the certificates.
18. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. An Award shall not be effective unless
the Award is in compliance with all applicable state, federal and foreign securities laws, rules
and regulations of any governmental body, and the requirements of any stock exchange or automated
quotation system on which the Shares may then be listed, as they are in effect on the date of grant
of the Award and also on the date of exercise or other issuance. Notwithstanding any other
provision in the Plan, the Company shall have no obligation to issue or deliver certificates for
Shares under the Plan prior to (a) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (b) completion of any registration or other
qualification of such shares under any state, federal or foreign law or ruling of any governmental
body that the Company determines to be necessary or advisable. The Company shall be under no
obligation to register the Shares with the SEC or to effect compliance with the registration,
qualification or listing requirements of any state, federal or foreign securities laws, stock
exchange or automated quotation system, and the Company shall have no liability for any inability
or failure to do so.
19. NO OBLIGATION TO EMPLOY. Nothing in the Plan or any Award granted under the Plan shall
confer or be deemed to confer on any Participant any right to continue in the employ of, or to
continue any other relationship with, the Company or any Parent or Subsidiary or limit in any way
the right of the Company or any Parent or Subsidiary to terminate Participants employment or other
relationship at any time, with or without cause.
20. REPRICING PROHIBITED; EXCHANGE AND BUYOUT OF AWARDS. The repricing of Options or SARs is
prohibited without prior stockholder approval. The Committee may, at any time or from time to
time, authorize the Company, with prior stockholder approval, in the case of an Option or SAR
exchange, and the consent of the respective Participants, to issue new Awards in exchange for the
surrender and cancellation of any or all outstanding Awards. The Committee may at any time buy
from a Participant an Option previously granted with payment in cash, Shares or other
consideration, based on such terms and conditions as the Committee and the Participant shall agree;
provided, however, that in no event will an Option with an Exercise Price above the Fair Market
Value at the time of such proposed buyout be repurchased.
21. CORPORATE TRANSACTIONS.
21.1 Assumption or Replacement of Awards by Successor. Except as provided for in
Section 10.7(e), in the event of a Corporate Transaction any or all outstanding Awards may be
assumed or replaced by the successor corporation, which assumption or replacement shall be binding
on all Participants. In the alternative, the successor corporation may substitute equivalent
Awards or provide substantially similar consideration to Participants as was provided to
stockholders (after taking into account the existing provisions of the Awards). The successor
corporation may also issue, in place of outstanding Shares of the Company held by the Participant,
substantially similar shares or other property subject to repurchase restrictions no less favorable
to the Participant. In the event such successor corporation, if any, refuses to assume or replace
the Awards, as provided above, pursuant to a Corporate Transaction or if there is no successor
corporation due to a dissolution or liquidation of the Company, such Awards shall immediately vest
as to 100% of the Shares subject thereto at such time and on such conditions as the Board shall
determine and the Awards shall expire at the closing of the transaction or at the time of
dissolution or liquidation.
21.2 Other Treatment of Awards. Subject to any greater rights granted to Participants
under Section 21.1, in the event of a Corporate Transaction, any outstanding Awards shall be
treated as provided in the applicable agreement or plan of merger, consolidation, dissolution,
liquidation or sale of assets.
21.3 Assumption of Awards by the Company. The Company, from time to time, also may
substitute or assume outstanding awards granted by another company, whether in connection with an
acquisition of such other company or otherwise, by either (a) granting an Award under the Plan in
substitution of such other companys award, or (b) assuming such award as if it had been granted
under the Plan if the terms of such assumed award could be applied to an Award granted under the
Plan. Such substitution or assumption shall be permissible if the holder of the substituted or
assumed award would have been eligible to be granted an Award under the Plan if the other company
had applied the rules of the Plan to such grant. In the event the Company assumes an award granted
by another company, the terms and conditions of such award shall remain unchanged (except that the
exercise price and the number and nature of Shares issuable upon exercise of any such option will
be adjusted appropriately pursuant to Section 424(a) of the Code). In the event the Company elects
to grant a new Option rather than assuming an existing option, such new Option may be granted with
a similarly adjusted Exercise Price.
22. ADOPTION AND STOCKHOLDER APPROVAL. The Plan was adopted by the Compensation and
Organizational Development Committee on August 26, 2004. The Plan shall become effective upon
approval by stockholders of the Company, consistent with applicable laws.
23. TERM OF PLAN. The Plan will terminate five years following the date it originally became
effective upon approval by stockholders of the Company.
24. AMENDMENT OR TERMINATION OF PLAN. The Board may at any time terminate or amend the Plan
in any respect, including without limitation amendment of any form of Award Agreement or instrument
to be executed pursuant to the Plan. Notwithstanding the foregoing, neither the Board nor the
Committee shall, without the approval of the stockholders of the Company, amend the Plan in any
manner that requires such stockholder approval pursuant to the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans or pursuant to the Exchange Act or any rule
promulgated thereunder or pursuant to the listing requirements of the national securities market on
which the Shares are listed. In addition, no amendment that is detrimental to a Participant may be
made to any outstanding Award without the consent of the Participant.
25. NONEXCLUSIVITY OF THE PLAN; UNFUNDED PLAN. Neither the adoption of the Plan by the Board,
the submission of the Plan to the stockholders of the Company for approval, nor any provision of
the Plan shall be construed as creating any limitations on the power of the Board to adopt such
additional compensation arrangements as it may deem desirable, including, without limitation, the
granting of stock options and bonuses otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases. The Plan shall be unfunded.
Neither the Company nor the Board shall be required to segregate any assets that may at any time be
represented by Awards made pursuant to the Plan. Neither the Company, nor the Committee, nor the
Board shall be deemed to be a trustee of any amounts to be paid under the Plan.
26. DEFINITIONS. As used in the Plan, the following terms shall have the following meanings:
(a) Authorized Transferee means the permissible recipient, as authorized by this
Plan and the Committee, of an NQSO that is transferred during the Participants lifetime by the
Participant by gift or domestic relations order. For purposes of this definition a permissible
recipient is: (i) a child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law of the Participant, including any such person with such
relationship to the Participant by adoption; (ii) any person (other than a tenant or employee)
sharing the Participants household; (iii) a trust in which the persons in (i) or (ii) have more
than fifty percent of the beneficial interest; (iv) a foundation in which the persons in (i) or
(ii) or the Participant control the management of assets; or (v) any other entity in which the
person in (i) or (ii) or the Participant own more than fifty percent of the voting interest.
(b) Award means any award under the Plan, including any Option, Restricted Stock,
Stock Bonus, Stock Appreciation Right or Restricted Stock Unit.
(c) Award Agreement means, with respect to each Award, the signed written agreement
between the Company and the Participant setting forth the terms and conditions of the Award.
(d) Board means the Board of Directors of the Company.
(e) Code means the Internal Revenue Code of 1986, as amended, and the regulations
promulgated thereunder.
(f) Committee means the Compensation and Organizational Development Committee of the
Board or such other committee appointed by the Board to administer the Plan, or if no committee is
appointed, the Board. Each member of the Committee shall be (i) a non-employee director for
purposes of Section 16 and Rule 16b-3 of the Exchange Act, and (ii) an outside director for
purposes of Section 162(m) of the Code, unless the Board has fewer than two such outside directors.
(g) Company means Intuit Inc., a corporation organized under the laws of the State
of Delaware, or any successor corporation.
(h) Corporate Transaction means (a) a merger or consolidation in which the Company
is not the surviving corporation (other than a merger or consolidation with a wholly-owned
subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in
which there is no substantial change in the stockholders of the Company and the Awards granted
under the Plan are assumed or replaced by the successor corporation, which assumption shall be
binding on all Participants), (b) a dissolution or liquidation of the Company, (c) the sale of
substantially all of the assets of the Company, (d) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to such merger (other
than any stockholder that merges, or which owns or controls another corporation that merges, with
the Company in such merger) cease to own their shares or other equity interest in the Company; or
(e) any other transaction which qualifies as a corporate transaction under Section 424(a) of the
Code wherein the stockholders of the Company give up all of their equity interest in the Company
(except for the acquisition, sale or transfer of all or substantially all of the outstanding shares
of the Company).
(i) Disability means a disability within the meaning of Section 22(e)(3) of the
Code, as determined by the Committee.
(j) Effective Date means the date stockholders approve the Plan pursuant
to Section 22 of the Plan.
(k) Exchange Act means the Securities Exchange Act of 1934, as amended, and the
regulations promulgated thereunder.
(l) Executive Officer means a person who is an executive officer of the Company as
defined in Rule 3b-7 promulgated under the Exchange Act.
(m) Exercise Price means the price at which a Participant who holds an Option or SAR
may purchase the Shares issuable upon exercise of the Option or SAR.
(n) Fair Market Value means, as of any date, the value of a share of the Companys
Common Stock determined as follows:
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if such Common Stock is then quoted on the NASDAQ National
Market, its closing price on the NASDAQ National Market on such date or if such
date is not a trading date, the closing price on the NASDAQ National Market on
the last trading date that precedes such date; |
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if such Common Stock is publicly traded and is then listed on a
national securities exchange, the last reported sale price on such date or, if
no such reported sale takes place on such date, the average of the closing bid
and asked prices on the principal national securities exchange on which the
Common Stock is listed or admitted to trading; |
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if such Common Stock is publicly traded but is not quoted on
the NASDAQ National Market nor listed or admitted to trading on a national
securities exchange, the average of the closing bid and asked prices on such
date, as reported by The Wall Street Journal, for the over-the-counter market;
or |
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if none of the foregoing is applicable, by the Board of
Directors in good faith. |
(o) Insider means an officer or director of the Company or any other person whose
transactions in the Companys Common Stock are subject to Section 16 of the Exchange Act.
(p) ISO means an Incentive Stock Option within the meaning of the Code.
(q) NASD Dealer means broker-dealer that is a member of the National Association of
Securities Dealers, Inc.
(r) NQSO means a nonqualified stock option that does not qualify as an
ISO.
(s) Option means an Award pursuant to Section 5 of the Plan.
(t) Non-Employee Director means a member of the Companys Board of Directors who is
not a current or former employee of the Company or any Parent or Subsidiary.
(u) Parent means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company, if at the time of the granting of an Award under the Plan,
each of such corporations other than the Company owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in such chain.
(v) Participant means a person who receives an Award under the Plan.
(w) Performance Factors means the factors selected by the Committee from among the
following measures to determine whether the performance goals established by the Committee and
applicable to Awards have been satisfied:
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Net revenue and/or net revenue growth; |
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Earnings before income taxes and amortization and/or earnings
before income taxes and amortization growth; |
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Operating income and/or operating income growth; |
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Net income and/or net income growth; |
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Earnings per share and/or earnings per share growth; |
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Total stockholder return and/or total stockholder return
growth; |
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Return on equity; |
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Operating cash flow return on income; |
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Adjusted operating cash flow return on income; |
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Economic value added; and |
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Individual business objectives. |
(x) Performance Period means the period of service determined by the Committee, not
to exceed five years, during which years of service or performance is to be measured for the Award.
(y) Plan means this Intuit Inc. 2005 Equity Incentive Plan, as amended from time to
time.
(z) Prospectus means the prospectus relating to the Plan, as amended from time to
time, that is prepared by the Company and delivered or made available to Participants pursuant to
the requirements of the Securities Act.
(aa) Purchase Price means the price to be paid for Shares acquired under the Plan,
other than Shares acquired upon exercise of an Option.
(bb) Restricted Stock Award means an award of Shares pursuant to Section 6 of the Plan.
(cc) Restricted Stock Unit means an Award granted pursuant to Section 9 of the Plan.
(dd) RSU Agreement means an agreement evidencing a Restricted Stock Unit Award
granted pursuant to Section 9 of the Plan.
(ee) SAR Agreement means an agreement evidencing a Stock Appreciation Right granted
pursuant to Section 8 of the Plan.
(ff) SEC means the Securities and Exchange Commission.
(gg) Securities Act means the Securities Act of 1933, as amended, and the
regulations promulgated thereunder.
(hh) Shares means shares of the Companys Common Stock $0.01 par value, reserved for
issuance under the Plan, as adjusted pursuant to Sections 2 and 21, and any successor security.
(ii) Stock Appreciation Right means an Award granted pursuant to Section 8 of the Plan.
(jj) Stock Bonus means an Award granted pursuant to Section 7 of the Plan.
(kk) Stock Option Agreement means the agreement which evidences a Stock Option,
granted pursuant to Section 5 of the Plan.
(ll) Subsidiary means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if, at the time of granting of the Award, each of the
corporations other than the last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one of the other corporations in
such chain.
(mm) Ten Percent Stockholder means any person who directly or by attribution owns
more than ten percent of the total combined voting power of all classes of stock of the Company or
any Parent or Subsidiary.
(nn) Termination or Terminated means, for purposes of the Plan with
respect to a Participant, that the Participant has ceased to provide services as an employee,
director, consultant, independent contractor or adviser, to the Company or a Parent or Subsidiary;
provided that a Participant shall not be deemed to be Terminated if the Participant is on a leave
of absence approved by the Committee or by an officer of the Company designated by the Committee;
and provided further, that during any approved leave of absence, vesting of Awards shall be
suspended or continue in accordance with guidelines established from time to time by the Committee.
Subject to the foregoing, the Committee shall have sole discretion to determine whether a
Participant has ceased to provide services and the effective date on which the Participant ceased
to provide services (the Termination Date).
INTUIT INC.
PO BOX 7850
MOUNTAIN VIEW, CA 94039
VOTE BY INTERNET www.proxyvote.com
Use the Internet to transmit your voting instructions and for electronic
delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand when you access the web site and
follow the
instructions to obtain your records and to create an electronic
voting instruction form.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Intuit Inc. in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the
Internet. To sign up for electronic delivery, please follow the instructions above to
vote using the Internet and, when prompted, indicate that you agree to
receive or access shareholder communications electronically in future years.
VOTE BY PHONE 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M.
Eastern Time the day before the cut-off date or meeting date. Have your proxy card in
hand when you call and then follow the instructions.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-
paid envelope we have provided or return it to Intuit Inc., c/o Broadridge, 51
Mercedes Way, Edgewood, NY 11717.
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Please date, sign and mail your
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proxy card back as soon as possible! |
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Annual Meeting of Stockholders |
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INTUIT INC. |
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December 14, 2007 |
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- Please detach and Mail in Envelope Provided - |
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TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:
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INTUIT
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KEEP THIS PORTION FOR YOUR RECORDS |
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THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. |
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DETACH AND RETURN THIS PORTION ONLY
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INTUIT INC. |
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The Board of Directors recommends that you
vote FOR the election of all nominees for
election to the
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Board of Directors and FOR proposals 2, 3 and 4.
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To withhold authority to vote for any individual |
1.
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ELECTION OF DIRECTORS.
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For
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Withhold
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For All
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nominee(s), mark For All Except and write the |
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Nominees:
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All
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All
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Except
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number(s) of the nominee(s) on the line below. |
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01) Stephen M. Bennett
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06) Michael R. Hallman |
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02) Christopher W. Brody
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07) Edward A. Kangas
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03) William V. Campbell
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08) Suzanne Nora Johnson |
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04) Scott D. Cook
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09) Dennis D. Powell |
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05) Diane B. Greene
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10) Stratton D. Sclavos |
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Vote
On Proposals |
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For |
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Against |
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Abstain |
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2.
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Ratify the selection of Ernst & Young LLP as our independent registered public accounting firm for
fiscal 2008;
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3.
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Approve the amendment to our 2005 Equity Incentive Plan;
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4.
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Approve the adoption of our Senior Executive Incentive Plan. |
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NOTE: Please sign exactly as your name(s) appear(s) on the stock
certificate. If shares of stock stand of record in the names of two or more
persons or in the name of husband and wife,
whether as joint tenants or otherwise, both
or all of such persons should sign the
proxy. If shares of stock are held of record
by a corporation, the proxy should be
executed by the president or vice president
and the secretary or assistant secretary.
Executors, administrators or other
fiduciaries who execute the above
proxy for a stockholder should give their full title. Please date the
proxy.
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Signature
[PLEASE SIGN WITHIN BOX] |
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Signature (Joint Owners) |
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Date |
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INTUIT INC.
PROXY FOR ANNUAL MEETING OF
STOCKHOLDERS
DECEMBER 14, 2007
The undersigned hereby appoints Stephen M. Bennett and Laura A. Fennell, or either of them, each
with full power of substitution, to represent the undersigned at the Annual Meeting of
Stockholders of Intuit Inc. to be held at 8:30 a.m. Pacific Standard Time on December 14, 2007,
at Intuits offices at 2600 Casey Avenue, Mountain View, California, and at any adjournment or
postponement thereof, and to vote the number of shares the undersigned would be entitled to vote
if personally present at the meeting on the matters listed on the reverse side:
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF INTUIT. THIS PROXY WILL BE VOTED
AS DIRECTED. IN THE ABSENCE OF DIRECTION, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR ELECTION
AND FOR PROPOSALS 2, 3, and 4. In their discretion, the proxy holders are authorized to vote
upon such other business as may properly come before the meeting, and at any
adjournment or postponement thereof, to the extent authorized by Rule 14a-4(c) promulgated by
the Securities and Exchange Commission, and by applicable state laws (including matters
that the proxy holders do not know, a reasonable time before this solicitation, are to be
presented).
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON, YOU ARE URGED TO COMPLETE, DATE, SIGN
AND PROMPTLY MAIL THIS PROXY IN THE ENCLOSED RETURN ENVELOPE SO THAT THE SHARES MAY BE
REPRESENTED AT THE MEETING.
(Continued, and to be marked, dated and signed, on the other side)